Whether you are farming 250 acres or cropping 1,000-plus acres, production costs ranged by a mere 10 cents per bushel for those crop farms throughout the Heartland. That’s according to recent research by the University of Illinois’ Carl Zulauf detailed in his paper, “Comparing Economies of size: Milk vs. Field Crops."

In creating this analysis, Zulauf evaluated cropping costs for barley, corn, oats, sorghum, soybeans, and wheat. Cropping expenses averaged $1.70 per bushel at 250- to 500-acre farms and shrunk to $1.60 for the 1,000-plus acre category. The 250 to 500 category represented the middle tier of crop farms with 0 to 100 acres, and 100 to 250 rounding out the earlier categories where costs were $2.82 and $1.92 per bushel, respectfully.

Dairy differed big time

“There are much larger economies of size for milk . . .” wrote Zulauf. “For example, cost is 22 percentage points higher for the second largest than the largest dairy farms. In stark contrast, cost for the second smallest crop farms is only 20 percentage points higher than the cost for the largest crop farm,” he went on to explain. See the figure.

Overall, costs of production for the dairy farm categories in 2012 were as follows:

  • Under 50 cows, $47.73 per cwt. (hundredweight)
  • 50 to 99 cows, $37.61 per cwt.
  • 100 to 199 cows, $30.73 per cwt.
  • 200 to 499 cows, $27.82 per cwt.
  • 500 to 999 cows, $22.89 per cwt.
  • 1,000-plus cows, $18.74 per cwt.

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(c) Hoard's Dairyman Intel 2017
August 28, 2017
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