While the income picture for the 2011 corn production season certainly is looking rosier than at this time last year, costs will rise on some inputs and credit availability will continue to be a concern as banks tighten their lending limits and terms.

Most economists are predicting interest rates will rise this year as banks seek to reduce the risks associated with loans and to offset losses from other sectors.

Demand and price look good for as far as the eye can see, with corn disappearance for the 2010/11 marketing year projected to exceed production by 890 million bushels which will cut stocks by more than half to 827 million bushels of carryover, 6.2 percent of total use.

Prices are expected to average higher than in the past two years, with the early forecasted price range by USDA for the 2010/11 corn marketing season set at $4.80 to $5.60 per bushel. Prices are on the rise due to concerns for a shortage next year and even possible price rationing to slow demand.

But as producers know all too well, price and demand aren’t the only factors to be considered in budgeting for a new crop year.

Looking at the University of Georgia corn enterprise budgets for 2011, Extension Economist Nathan Smith says variable costs are expected to increase by 13 percent this year for dryland corn and by 14 percent for irrigated corn. These increases, says Smith, are due primarily to higher fertilizer prices, crop insurance and fuel prices. Seed costs, he adds, are expected to remain the same for most varieties.

Smith discussed the 2011 corn budgets during the recent Georgia Corn Short Course held in Tifton, Ga.

Taking each line of the budget separately, beginning with seed, fertilizer and chemicals, he says seed costs are projected to remain flat in 2011. However, the range for price might widen as newly introduced varieties will have higher prices. Cost per bag for corn seed likely will range from between $190 to $265 per bag, depending on the variety and technology.