At this writing it is difficult to estimate costs for the 2013 production year, but I am assuming variable cost will be stable for 2013. Fertilizer and seed costs will be the ones to watch for 2013.

Producers who have trouble controlling glyphosate resistant weeds will have higher weed control costs.

Land costs are 25 percent of revenue and are used as a method of comparison.


2013 Estimated Returns Per Acre







830 lbs.

37 bu.

120 bu.

60bu./27 bu.


$0.78 lb.

$13.25 bu.

$6.20 bu.

$8.39 bu./$13.25 bu.






Variable Expenses





Returns Over Variable





Land Costs





Returns Over Variable & Land Costs





Fixed Costs





Returns Over Specified Costs






This is at least a starting point for 2013 planning. In crop decisions where there are no equipment changes, I look closely at Returns over Variable Costs for own or cash rent ground or in the case of share rent — Returns over Variable and Land Costs.

If equipment changes are going to be made, I might consider fixed costs, but really recommend a whole farm plan. In the above scenario, wheat and double-crop soybeans are worth considering, particularly on own or cash rent ground.

It generally seems the yield of double-crop soybeans is the key to the viability of the system. Wheat on its own would return $242 per acre over variable expenses or $118 per acre over variable and land costs, so 44 percent of the returns are coming from the double-crop soybeans.

Considering the above assumptions, corn again looks strong for 2013. Cotton does not look very exciting at this time, but could be the sleeper crop for 2013 if acreage (U.S. and foreign) is reduced and the economy improves moving prices higher.

There still is plenty of time to compare cotton, corn, and soybeans, but looking at these numbers gives me some confidence that wheat and double-crop soybeans can have a place in the crop mix for producers in 2013.

Develop your own estimates and use your numbers as you plan for the next year.

Developing or updating budgets is a very useful tool that can be performed throughout the year. It is important to use this tool before making major marketing decisions, wheat planting decisions, seed or input orders, and final planting decisions.

I will be updating these numbers as we go throughout the year and they will be posted at Profitability Outlook.

Discuss with your supplier, fertilizer and other inputs. If commodity prices stay strong or increase, fertilizer and other input prices will most likely increase.

Producers who know what their phosphate and potash needs are for 2013 may want to consider applying them this fall or locking in current prices.

Every farm situation is different, so plan ahead to make informed decisions in your operation. If you would like assistance in developing a farm plan or budget, contact your local County Extension office, Area Specialist — Farm Management, or in Tennessee call the MANAGEment Information Line at 1-800-345-056.