Biofuels Industry and Impacts on Agriculture

Dwight AakreFarm Management Specialist

January 2007Web Page: http://www.ag.ndsu.nodak.edu/aginfo/farmmgmt/farmmgmt.htm

12-27-06

Some Energy Statistics

In 2005, the U.S. consumed 139.9 billion gallons of gasoline produced 3.9 billion gallons of ethanol consumed 43.2 billion gallons of diesel produced 75 million gallons of biodiesel imported 65 percent of all petroleum

Sources of Imported Oil (2004)Source % of U.S. Consumption

Canada 10.4Mexico 10.3Middle East

Saudi Arabia 9.3Iraq 4.1Kuwait 1.2

14.6

Venezuela 8.7Nigeria 7.1Other 9.9

Oil Imports – The Risk

30 percent of our oil comes from the Middle East, Venezuela and Nigeria (politically volatile areas)

corn ethanol can provide about 10 percent without increasing food and feed prices

reducing the risk requires moving to cellulosic ethanol

Ethanol Industry Expansion

As of June, 102 plants operating with 4.75 b gallons of capacity

32 new plants under construction with 3.03 b gallons of capacity

another 127 plants announced with 8.21 b gallons of capacity

Total capacity if all plants are built is 15.99 b gallons

Ethanol Plant Ownership

Current Plants 47 percent of plants are farmer owned 39 percent of production from farmer owned

Plants under Construction 12 percent of plants are farmer owned 11 percent of production farmer owned

Corn used for Ethanol – U.S.

2005 – 11 percent of corn production used for ethanol

2007 – 25 percent of corn production used for ethanol

by 2008 – N.D. plants will use 90 percent of 2006 production

Some Biofuels Statistics

1 bushel of corn = 2.7 gallons of ethanol 7.5 lbs of soybean oil = 1 gallon B100 ethanol has 1.25-1.33 to 1 energy ratio B100 has a 3.2 to 1 energy ratio

What has driven ethanol expansion?

MTBE replacement has been the biggest driver new energy bill – RFS

mandates total RF usage at 7.5 bn gals. by 2012 renewable fuel is ethanol and biodiesel cellulosic/waste ethanol counts 2.5x

state level RFS policy incentives for using renewable energy

Projected Growth in Ethanol Supply

supply likely to be 9-10 bn gallons by 2012 by 2015 or earlier, ethanol from biomass will

become commercially viable currently, an acre of Iowa corn produces about

450 gallons of ethanol (N.D. – 315 gallons) utilizing 25 percent of the stover could produce

another 150 gallons of ethanol (N.D. – 105 gallons)

Possible Expansion – Ethanol Plants

Agri-Ethanol – announced financing for 20 facilities –East Coast 100 m gals and at 380,000 tons each

Illinois governor proposed building 20 (corn) ethanol plants, 5 biodiesel plants and 4 waste ethanol plants

West Coast – 14 large plants proposed in California and Oregon

Iowa – 50 m gallon waste to ethanol plant (waste coal, used tires, wood waste, biomass, cornstalks)

Saskatchewan – Husky Energy just opened a 50m gallon plant using wheat

Impacts of Expanded Ethanol Industry

significant number of rural-based, good-paying jobs

localized improvement in basis leads to higher price to farmers, higher feedstock prices and less plant profitability

impact traditional markets, livestock, exports, alternative crops

some regions may overbuild

Ethanol Risks

lower oil prices surplus of DDGS slowing of RFS momentum shortage of feed stock relatively long lag on construction

Ethanol Price

Why is ethanol high priced when corn is cheap? Ethanol is a substitute for gasoline

In reserveFuel cost

Oil price at which energySource is economically viable$80 Biodiesel*

$60 US corn-based ethanol*

$50 Shale oil

$40 Tar sands; Brazilian cane-based ethanol;Gas-to-liquids; Coal-to-liquids

$20 Conventional oil

*Excludes the impact of tax creditsGTL economist at $40 if gas feedstock price is $2.50

or less per m BTUsCTL economic at $40 if feedstock price is

$15 per tonne or less

Sources: Cambridge Energy Research Associates;The Economist

2 2

Market Breakers or Makers

Demand picture could change if crude oil and gasoline prices decline clean air regulations relaxed

Supply picture could change if corn prices increase ethanol incentives and tax subsidies reduced emission regulations on plants relaxed tariff on Brazilian imports eliminated

Biodiesel Statistics

plants can be relatively small cost about $1/gallon of capacity full economies of scale at around 10 m gallons currently about 395 m gallons of capacity 700 m gallons of new capacity under

construction

Biodiesel Outlook

much better energy balance than ethanol smaller, more dispersed plants higher feedstock costs as percent of input less fuel specifications certainty and research

than ethanol 1 to 3 years behind ethanol in consumer

acceptance

Possible Expansion – Biodiesel Plants Dakota Skies Biodiesel – Minot – 30 m gals ADM – Velva – 85 m gals Advanced Biodiesel Group plans two plants in the U.S., one in

Canada Sunflower Electric Power Co. – looking at biodiesel and ethanol

plants Renewable Energy Group - Ralston, Iowa – announced plans to

build 12 biodiesel plants. Capacity – 640 m gals (8 x 2005 usage) Green Star Products – Idaho – plans super clean biodiesel plant.

Would run on its own biodiesel rather than natural gas. Rabobank estimates there are about 50 biodiesel plants under

construction in the U.S. today

Biggest Boost for Biodiesel is the Federal Tax Credit

A per gallon write-off for biodiesel blenders $0.50 per gallon for fuel from recycled grease $1.00 per gallon for fuel from fresh vegetable oil Recycled grease is the preferred feedstock

because it is cheaper

U.S. Acreage of Annual Crops

2006 Corn 78,561,000Soybeans 75,565,000Wheat 57,344,000Other 44,539,000All 256,009,000

Corn Acres Needed

In order to maintain existing markets: by 2011, we will need 14 million additional corn

acres at trend-line yields Expected ethanol production of 10 to 11 billion

gallons

Soybean Acres Needed

If the majority of expansion uses soybean oil: By 2011 we will need 4.5 million additional acres of

soybeans at trend-line yields SBO has competition from corn oil, white or yellow

grease, other

Impact on Soybeans (FAPRI)

planted acreage decreases 3.3 million acres from 06/07 to 10/11 crop years

oil used for biodiesel doubles from 107 million gallons to 216 million gallons

Soybean oil price increases 27 percent Soybean meal price decreases 8 percent farm price of beans increases 4 percent

Potential Crop Acreage Shift

Corn Belt soybeans and winter wheat to corn CRP will come back into production

Great Plains increase in corn and sorghum decrease in small grains increase in minor oilseeds little change in soybeans CRP will be reduced

Ethanol and Biodiesel Represent New Demand

increased demand leads to a higher price higher price leads to increased supply higher price leads to less quantity demanded and

a search for a substitute cellulose feedstock for ethanol

Biomass Potential from Crop Residue

Corn Belt – 98.9 m tons – (corn stover) Great Plains – 35.5 m tons – (corn and soybean

stover, wheat, barley and oat straw) West Coast – 2.4 m tons – (corn stover, wheat,

barley and oat straw) Delta – 4.6 m tons – (rice straw) Southeast – 3.6 m tons – (sugarcane bi-product)

Difficulties with Biomass

bulky – high transportation cost inconsistent quality characteristics contamination, impurities

Livestock Impacts

DDGS is a partial replacement for soybean meal and corn

SBM is higher in amino acids and is more digestible U of M dietary recommendations:

grow finish hogs – 10 to 20 percent of ration lactating sows – 20 percent gestating sows – 30 to 40 percent broilers, layers, turkeys – 10 to 15 percent lactating dairy cows – 20 percent beef cattle – 30 to 40 percent

Livestock and Poultry Impacts (FAPRI)

production of all livestock species increase net returns to all species are down turkeys, broilers and hogs experience the biggest

reduction in net returns

Transportation is a Big Challenge for DDGS

costs $50 per ton to ship to California dairies costs $6 per ton to ship to Midwest swine and

poultry outlets increased costs of containers hurts exports

Will the livestock industry move back to the Midwest?

or

Will new ethanol plants locate nearer livestock or energy source?

Risk

Who will blink when the next short corn crop arrives?1. Will exports drop off?2. Will livestock feeders buy less?

1. Find substitutes2. Liquidate herds

3. Will ethanol plants shut down?4. Will food processors back away from corn?

Will ND/MN farmers change cropping plans for 2007?

market prices rotations risk equipment rents

Cash Price for Breakeven Return over Variable Costs - North RRV, N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean Wheat Barley Drybeans Oil Snflr Conf Snflr Canola Flax

Yield 101 31 42 57 14.7 13.7 12.5 13.2 23Price $3.00 $6.94 $5.90 $3.98 $18.07 $17.21 $20.58 $19.17 $9.30Income $303.00 $215.28 $247.64 $226.67 $265.70 $235.84 $257.19 $253.03 $213.98

Variable costs: seed $38.36 $32.59 $13.80 $11.00 $31.00 $16.32 $23.60 $18.15 $6.40 herbicide 8.00 8.00 14.20 12.50 24.00 15.50 15.50 17.50 14.71 fungicide 5.00 1.25 insecticide 5.00 11.00 7.00 fertilizer 43.25 0.10 33.93 25.61 21.09 17.32 14.54 31.76 17.10 crop insurance 17.70 8.30 10.30 4.91 15.30 7.52 12.35 10.90 5.55 fuel & lube 19.74 11.88 14.27 15.46 15.87 15.21 15.69 12.35 14.78 repairs 15.46 10.43 11.42 12.03 13.02 11.96 12.15 10.44 12.01 drying 13.64 2.74 2.52 misc. 1.00 1.50 1.00 1.00 1.00 1.00 5.75 1.00 1.00 operating int. 6.29 2.91 4.16 3.35 4.85 3.70 4.52 4.36 2.86Total var.costs $163.44 $75.71 $108.08 $87.11 $126.13 $96.27 $117.62 $113.46 $74.41

Return over $139.56 $139.56 $139.56 $139.56 $139.56 $139.56 $139.56 $139.56 $139.56variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - North East N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean Wheat Barley Drybeans Oil Snflr Conf Sunf Canola Flax

Yield 94 27 36 55 14.2 13.2 11.9 14.4 22Price $3.00 $7.74 $6.06 $3.74 $17.79 $16.49 $20.14 $16.64 $8.77Income $282.00 $208.92 $218.31 $205.81 $252.63 $217.70 $239.69 $239.64 $193.00

Variable costs: seed $36.99 $32.01 $12.08 $11.00 $31.00 $14.96 $22.42 $18.15 $6.40 herbicide 8.00 8.00 13.10 11.30 24.00 15.50 15.50 17.50 14.71 fungicide 5.00 1.25 insecticide 5.00 11.00 7.00 fertilizer 43.67 6.35 29.03 26.91 22.90 17.70 14.51 38.66 16.87 crop insurance 19.00 9.70 9.40 4.12 17.50 8.09 13.92 10.30 4.94 fuel & lube 17.91 12.92 12.45 13.79 15.94 14.90 15.37 10.82 13.13 repairs 14.66 11.17 10.62 11.29 13.34 12.20 12.39 9.76 11.29 drying 12.69 2.74 2.38 misc. 1.00 3.50 1.00 1.00 1.00 1.00 5.75 1.00 1.00 operating int. 6.16 3.35 3.71 3.23 5.03 3.68 4.53 4.53 2.73Total var.costs $160.08 $87.00 $96.39 $83.89 $130.71 $95.77 $117.77 $117.72 $71.07

Return over $121.92 $121.92 $121.92 $121.92 $121.92 $121.92 $121.92 $121.92 $121.92variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - North Central N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean S. Wht Durum Barley Drybeans Oil Snflr Field Pea Canola Flax W. Wht

Yield 80 25 31 30 55 14 13.6 33 13.8 21 42Price $3.00 $7.42 $5.97 $6.23 $3.30 $16.33 $14.40 $5.61 $15.71 $8.21 $4.53Income $240.00 $185.54 $184.95 $186.91 $181.50 $228.67 $195.83 $185.26 $216.82 $172.38 $190.09

Variable costs: seed $30.14 $32.59 $10.35 $14.00 $8.25 $31.00 $14.28 $19.20 $18.15 $5.60 $6.00 herbicide 8.00 8.00 13.10 13.10 11.30 24.00 15.50 17.00 17.50 17.71 8.15 fungicide 1.50 1.50 1.25 insecticide 5.00 7.00 fertilizer 31.50 3.56 20.80 19.68 24.20 21.16 16.81 5.45 33.61 13.91 33.11 crop insurance 15.00 7.50 7.20 6.60 3.24 14.20 5.71 6.88 8.30 4.80 7.20 fuel & lube 17.47 10.85 11.35 11.31 12.25 13.92 13.54 12.17 10.78 10.41 11.18 repairs 14.47 10.01 10.15 10.14 10.64 12.21 11.35 11.05 9.75 9.93 9.75 drying 10.80 2.72 misc. 1.00 3.50 1.00 1.00 1.00 1.00 1.00 4.00 1.00 1.00 5.00 operating int. 5.14 3.04 3.02 3.09 2.89 4.70 3.44 3.03 4.24 2.53 3.22Total var.costs $133.52 $79.05 $78.47 $80.42 $75.02 $122.19 $89.35 $78.78 $110.33 $65.89 $83.61

Return over $106.48 $106.48 $106.48 $106.48 $106.48 $106.48 $106.48 $106.48 $106.48 $106.48 $106.48variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk. - Crop insurance for corn is only available by written agreement in some counties.

Cash Price for Breakeven Return over Variable Costs - North West N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn S. Wht Durum Barley Oats Oil Snflr Field Pea Canola Flax W. Wht Lentils

Yield 63 28 29 47 58 12.1 31 13.7 19 32 13.5Price $3.00 $5.27 $5.19 $3.09 $2.43 $14.00 $4.76 $13.86 $7.44 $4.40 $10.93Income $189.00 $147.63 $150.62 $145.09 $141.05 $169.34 $147.50 $189.82 $141.42 $140.82 $147.57

Variable costs: seed $26.03 $8.63 $10.50 $6.25 $7.50 $15.98 $19.20 $18.15 $4.80 $6.00 $13.30 herbicide 11.00 14.30 14.30 13.80 4.88 23.65 20.00 20.50 20.71 8.15 23.50 fungicide 1.50 1.50 1.25 insecticide 5.00 7.00 fertilizer 26.01 21.00 22.16 22.54 24.48 16.86 6.47 37.63 14.50 25.66 4.70 crop insurance 15.00 6.50 7.10 3.89 6.44 8.44 3.81 8.50 5.50 6.50 7.71 fuel & lube 11.73 8.77 8.80 10.37 10.75 9.36 10.97 9.64 9.21 8.84 10.96 repairs 11.68 9.48 8.70 9.64 9.80 9.35 10.61 9.33 9.49 8.48 10.95 drying 8.51 2.42 misc. 5.00 5.00 5.00 5.00 5.00 5.00 4.00 5.00 5.00 5.00 4.00 operating int. 4.60 3.01 3.12 2.91 2.75 3.84 3.00 4.63 2.77 2.75 3.00Total var.costs $119.56 $78.19 $81.18 $75.65 $71.60 $99.90 $78.06 $120.38 $71.98 $71.38 $78.12

Return over $69.44 $69.44 $69.44 $69.44 $69.44 $69.44 $69.44 $69.44 $69.44 $69.44 $69.44variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk. - Crop insurance for corn is only available by written agreement. An estimate is used.

Cash Price for Breakeven Return over Variable Costs - South RRV, N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean S. Wht Barley Drybeans Oil Snflr Conf Snflr

Yield 125 34 44 61 14.7 14.6 13.2Price $3.00 $7.69 $6.40 $4.37 $20.43 $18.73 $22.15Income $375.00 $261.61 $281.48 $266.85 $300.30 $273.42 $292.44

Variable costs: seed $44.22 $32.59 $13.80 $11.00 $31.00 $16.32 $23.60 herbicide 11.00 11.00 14.20 12.50 24.00 15.50 15.50 fungicide 1.50 1.25 insecticide 6.00 6.00 5.00 11.00 fertilizer 60.37 1.69 38.81 31.03 23.28 21.68 18.38 crop insurance 17.70 7.70 7.70 4.26 13.10 5.31 8.51 fuel & lube 20.22 12.26 14.33 15.60 15.57 15.31 15.76 repairs 15.32 10.94 11.45 12.08 12.93 12.00 12.19 drying 16.88 2.92 2.64 misc. 1.00 1.50 1.00 1.00 1.00 1.00 5.75 operating int. 7.71 3.35 4.11 3.55 4.84 3.80 4.53Total var.costs $200.42 $87.03 $106.90 $92.27 $125.72 $98.84 $117.86

Return over $174.58 $174.58 $174.58 $174.58 $174.58 $174.58 $174.58variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - South East N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean S. Wht Barley Drybeans Oil Snflr Conf Snflr Canola Flax W. Wht

Yield 117 34 41 60 15.6 14.2 13.2 12 19 47Price $3.00 $7.41 $6.24 $4.09 $18.27 $18.04 $20.94 $22.58 $11.85 $5.34Income $351.00 $252.10 $255.89 $245.52 $284.94 $256.16 $276.36 $270.94 $225.09 $251.00

Variable costs: seed $43.48 $32.59 $12.08 $11.00 $31.00 $14.96 $22.42 $18.15 $6.40 $7.20 herbicide 11.00 11.00 13.10 11.30 24.00 15.50 15.50 17.50 14.71 8.15 fungicide 1.50 1.25 insecticide 6.00 6.00 5.00 11.00 7.00 fertilizer 54.09 1.69 33.69 28.71 23.53 19.14 16.78 28.92 12.08 40.73 crop insurance 18.80 8.00 6.90 3.04 10.60 5.34 8.42 10.00 3.51 6.90 fuel & lube 18.36 13.43 12.62 13.96 16.02 15.67 16.16 12.67 13.03 12.31 repairs 14.51 11.73 10.70 11.36 13.37 12.40 12.60 10.82 11.24 10.50 drying 15.80 2.84 2.64 misc. 1.00 3.50 1.00 1.00 1.00 1.00 5.75 1.00 1.00 1.10 operating int. 7.32 3.52 3.66 3.26 4.78 3.67 4.45 4.24 2.48 3.48Total var.costs $190.36 $91.46 $95.25 $84.88 $124.30 $95.52 $115.72 $110.30 $64.45 $90.37

Return over $160.64 $160.64 $160.64 $160.64 $160.64 $160.64 $160.64 $160.64 $160.64 $160.64variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - East Central N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean S. Wht Barley Drybeans Oil Snflr Conf Sunf Canola Flax W Wht

Yield 93 30 35 57 15.1 13.6 12 13.3 20 42Price $3.00 $6.95 $6.08 $3.61 $16.81 $16.08 $19.79 $18.02 $9.59 $4.99Income $279.00 $208.48 $212.69 $205.74 $253.78 $218.73 $237.45 $239.69 $191.85 $209.60

Variable costs: seed $36.99 $32.59 $10.35 $8.25 $31.00 $14.96 $22.42 $18.15 $5.60 $6.00 herbicide 8.00 8.00 13.10 11.30 24.00 15.50 15.50 17.50 14.71 8.15 fungicide 1.50 1.25 insecticide 5.00 11.00 7.00 fertilizer 41.25 4.28 27.18 27.45 23.92 18.83 14.56 33.96 13.95 35.36 crop insurance 16.40 8.30 8.80 3.86 15.20 5.60 9.36 9.70 5.33 8.80 fuel & lube 17.88 13.03 12.42 13.85 15.99 14.94 15.38 12.75 13.07 12.15 repairs 14.64 11.21 10.61 11.32 13.36 12.22 12.40 10.86 11.26 10.43 drying 12.56 2.72 2.40 misc. 1.00 3.50 1.00 1.00 1.00 1.00 5.75 1.00 1.00 1.10 operating int. 5.95 3.24 3.40 3.13 4.98 3.63 4.35 4.44 2.60 3.28Total var.costs $154.67 $84.15 $88.36 $81.41 $129.45 $94.40 $113.12 $115.36 $67.52 $85.27

Return over $124.33 $124.33 $124.33 $124.33 $124.33 $124.33 $124.33 $124.33 $124.33 $124.33variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - South Central N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn Soybean S. Wht Barley Drybeans Oil Snflr Conf Snflr Canola Flax W. Wht

Yield 84 25 30 55 13 13.3 12.8 12.9 18 46Price $3.00 $7.39 $5.88 $3.26 $17.31 $14.75 $17.04 $16.39 $9.06 $4.11Income $252.00 $184.81 $176.45 $179.12 $224.98 $196.13 $218.09 $211.48 $163.04 $189.18

Variable costs: seed $31.51 $32.59 $10.35 $8.25 $31.00 $14.96 $21.24 $18.15 $5.60 $6.00 herbicide 8.00 8.00 11.30 11.30 24.00 15.50 15.50 17.50 14.71 8.15 fungicide 1.50 1.25 insecticide 5.00 11.00 7.00 fertilizer 32.57 2.40 18.53 22.96 18.12 14.87 13.72 29.61 8.61 36.87 crop insurance 27.40 9.70 6.30 3.93 15.50 9.11 14.51 9.00 5.10 6.30 fuel & lube 16.19 10.85 10.44 12.25 13.87 13.51 13.46 10.72 10.99 9.78 repairs 13.65 10.01 9.60 10.64 12.19 11.33 11.31 9.72 10.11 9.16 drying 11.34 2.66 2.56 misc. 1.00 3.50 1.00 1.00 1.00 1.00 5.75 1.00 1.00 5.00 operating int. 5.67 3.08 2.76 2.86 4.63 3.52 4.36 4.11 2.24 3.25Total var.costs $147.33 $80.13 $71.78 $74.44 $120.31 $91.46 $113.41 $106.81 $58.36 $84.51

Return over $104.67 $104.67 $104.67 $104.67 $104.67 $104.67 $104.67 $104.67 $104.67 $104.67variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.

Cash Price for Breakeven Return over Variable Costs - South West N.D. Base Crop is Corn

Enter the futures price for Corn $3.60Enter your expected local basis $0.60Expected local cash price for Corn $3.00

Base crop = 1 1 0 0Corn S. Wht Durum Barley Oats Oil Snflr Field Pea Canola Flax W. Wht

Yield 63 28 30 48 54 12.3 29 12.1 18 34Price $3.00 $5.57 $5.35 $3.20 $2.71 $14.49 $5.38 $15.89 $8.17 $4.47Income $189.00 $156.03 $160.54 $153.74 $146.35 $178.19 $155.97 $192.33 $147.02 $152.04

Variable costs seed $26.03 $8.63 $10.50 $6.25 $7.50 $15.98 $19.20 $18.15 $4.80 $6.00 herbicide 8.00 14.30 14.30 13.80 4.88 23.65 20.00 20.50 17.71 8.15 fungicide 1.50 1.50 1.25 insecticide 5.00 7.00 fertilizer 17.71 14.37 16.53 15.63 14.70 10.85 2.25 24.48 7.31 20.85 crop insurance 15.00 6.70 6.90 3.76 6.22 7.59 4.11 8.90 4.92 6.70 fuel & lube 11.73 8.77 8.84 10.41 10.61 9.38 10.13 9.54 9.86 8.91 repairs 11.68 8.69 8.72 9.66 9.74 9.36 10.21 9.29 9.69 8.51 drying 8.51 2.46 misc. 1.00 5.00 5.00 5.00 5.00 5.00 2.00 5.00 5.00 5.00 operating int. 3.99 2.72 2.89 2.63 2.35 3.57 2.72 4.11 2.37 2.56Total var.costs $103.65 $70.68 $75.18 $68.39 $61.00 $92.84 $70.62 $106.97 $61.66 $66.68

Return over $85.35 $85.35 $85.35 $85.35 $85.35 $85.35 $85.35 $85.35 $85.35 $85.35variable costs

Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk. - Crop insurance for corn is only available by written agreement. An estimate is used.