By: PhD student Xiaoyi Fang and Professor Ani Katchova, Farm Income Enhancement Chair, in the Department of Agricultural, Environmental, and Development Economics (AEDE), and Clint Schroeder, Farm Business Analysis Program Manager, Ohio State University Extension.
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The Ohio Farm Business Analysis and Benchmarking Program, conducted by the Ohio State University Extension, offers benchmark reports for Ohio farms, summarizing farm business management, particularly in crop production. These reports provide insights on 38 key measures from crop enterprise analysis, covering income, expenses, and efficiency measures. In 2022, the program included 36 corn enterprises and 31 soybean enterprises, allowing participants to compare their performance against similar Ohio enterprises. Benchmark reports are tailored to crop type (corn or soybeans) and land tenure (owned or cash rented). The data on physical production, gross returns, direct and overhead costs, and net returns per acre offers valuable insights to farmers.
Corn and Soybean Production for Owned Land and Cash Rented Land
In 2022, 16 Ohio corn producers with owned land, with an average of 127 acres per enterprise for corn production, had a yield of 191.96 bushels per acre and an average corn value of $5.98 per bushel. This resulted in an average gross return of $1155.89 per acre. For the 20 corn enterprises on cash rented land in Ohio, the average enterprise size was 195.87 with a yield of 188.78 bushels per acre and a corn value of $6.10 per bushel, leading to an average gross return of $1166.69 per acre.
In Ohio, 12 soybean enterprises on owned land operated at an average of 133.47 acres in 2022. They had a gross return of $704.13 per acre, with a yield of 51.43 bushels per acre and an average soybean value of $13.6 per bushel. The 19 soybean enterprises on cash rented land had an average operation size of 279.3 acres. These enterprises earned an average return of $769.33 per acre, with a yield of 55.08 bushels per acre and an average value of $13.79 per bushel.
Direct Expenses of Crop Production
For cash rent corn enterprises, the cost of production for corn was $5.43 per bushel in 2022, including labor and management charges. Direct expenses averaged $807.45 per acre, with around 60% allocated to land rent, seed, and fertilizer.
Likewise, for cash rent soybean enterprises, the cost of production for soybeans was $11.81 per bushel, also including labor and management charges. Direct expenses averaged $520.91 per acre, with around 30% allocated to land rent.
For enterprises with owned land, the cost of production for corn was $5.36 per bushel in 2022, including labor and management charges. Direct expenses averaged $712.29 per acre, with more than half allocated to seed and fertilizer.
Similarly, for soybean enterprises with owned land, the cost of production for soybeans was $11.77 per bushel, also including labor and management charges, with direct expenses averaging $366.74 per acre.
Enterprises with owned land typically incur lower overall production costs per bushel for both corn and soybeans compared to cash rent enterprises. Cash rent enterprises incur higher direct expenses per acre for both crops, primarily due to significant land rent costs. Notably, corn production tends to be less costly per bushel than soybean production for both enterprise types. Land rent is a crucial cost component for cash rent enterprises but is not a direct expense for owned land enterprises.
Government Payments for Crop Production
In 2022, government payments for corn producers on cash rented land averaged $4.09 per acre, while soybean producers received an average of $2.23 per acre.
Government payments for corn producers on owned land averaged $2.47 per acre. Conversely, due to the small sample size, government payments were not reported by the 12 soybean enterprises on owned land.
The Bottom Line of Crop Production
For Ohio’s owned land corn enterprises in 2022, net returns averaged $119.62 per acre, considering all direct, overhead and management expenses, as well as contributions from government payments. Notably, the net returns were lower than those observed in corn enterprises on cash rented land, where the net return over labor and management stood at $127.28 per acre. The net returns for soybeans on owned land were $94.26 per acre, which were lower than the net returns of $109.13 per acre for soybean enterprises on cash rented land.
References:
Schroeder C. and Shoemaker, H. ”2022 Ohio Farm Business Summary.” Ohio State University Extension, September 2023.
