Part One budget information (Rye):

Numbers:

Price per bushel & yield

• $7.00/bu
• 34 bu/acre harvested

Seed price per bag and seeding rate

• $17.95/ 50 lb bag of seed
• 90 lbs of seed/acre

Fertilizer and chemical costs

• Fertilizer $66.60/acre
• Chemicals $50.78/acre

Labor price per hour

• $10/hour (Use harvest time formula)

Repair budget numbers

• $5/acre

Fuel price and gallons per hour

• $2.71/gallon
• 2.87 gallons diesel/hour

Hauling price per bushel

• $0.108/bu

Machinery interest

• Total interest:$1891
• Years of the loan: 4

Insurance rate

• Tractor purchase price:$20,000
• Insurance rate: $4/$1000 purchase value

Depreciation

• Tractor current hours: 1000 hours
• Tractor useful life: 3000 hours

Land rent

• $120/acre

Questions for Part One:

1. With yield of 34 bu. per acre, what is the break-even selling price?
2. If the selling price was only $5.50 per bu., what per acre yield would be necessary to break-even?
3. If the expected yield was only 30 bu. per acre, what selling price would be required to just break-even on the operation?
4. According to your budget, what is the Cost of Production per bu.?

How low must the price of Rye fall before you should stop production?