Lower fuel prices likely to have small impact on 2015 non-land corn, soybean production costs

Crude oil prices have decreased in recent weeks, leading to decreases in gasoline and diesel fuel prices. However, fuel costs are a low proportion of total costs of producing corn and soybeans. If current prices persist, they will have a small impact on 2015 production costs, according to Gary Schnitkey, University of Illinois ag economist.

Fuel and lube costs were $24/acre for growing corn on high-productivity farmland in central Illinois in 2013, or about 4% of the $615/acre total non-land costs. Current crude oil prices are roughly at the same level as 2010, when they equaled $17/acre. If 2015 fuel costs equal 2010, an $8/acre reduction will reduce non-land costs associated with producing corn by only 1.3%.

Fuel and lube costs for soybeans averaged $21/acre in 2013; in 2010, fuel and lube costs equaled $15/acre. Again, using 2010 as a benchmark, fuel price decreases could equal a $6/acre decrease, or 1.6% of the $368 non-land costs of producing soybeans in 2013.

Declines in fuel costs could lower other production costs, such as fertilizer and seed. However, these costs likely lag. As a result, crude oil price decreases likely will be felt not in 2015, but in 2016 and years thereafter if prices decreases persist.

From the standpoint of costs, fuel price reductions will reduce non-land costs of producing corn and soybeans. Cost decreases, however, will be modest compared to total production costs.

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Sulphur Springs Dairy Auction

Dairy replacement sales results from Sulphur Spring, Texas, on Nov. 6:

Fresh cows: 2000-2575

Holstein Springers: 2000-2900

Breeding age heifers: 1000-1300

Small heifers: 425-900

Heifer calves: 200-350

Toppenish, Wash.

Dairy replacement sales results from Toppenish, Wash, on Nov. 7. Compared to last month at same market,  springer heifers were $50-$200 per head higher. Trade was active with good demand..

Springer Holstein Heifers

Supreme: 2000-2250

Short-bred Holstein Heifers

Supreme: 1925-2060

Replacement Holstein heifers

355-436 lbs.: 220-240/cwt.

541-718 lbs.: 185-208/cwt.

750-865 lbs.: 165-174/cwt.

959-1057 lbs.: 152-160/cwt.

1212-1215 lbs.: 134-138/cwt.

1356-1415 lbs.: 110-113/cwt.

Replacement Jersey heifers

347-438 lbs.: 1025-1050

640 lbs.: 131/cwt.

Video/Internet auction

 Demand good. All sales current FOB at Oregon-Washington dairies.

Springer Jersey heifers

Supreme: 2475-2500

Fresh Young Jersey cows

Supreme: 2575

Young Bred Cows (3-6 mos. bred) (3-5 yrs. old)

 Supreme: 1850-1960

Replacement Jersey heifers

440 lbs.: 1425

560 lbs.: 1550