Iowa State University for many years has produced enterprise budgets for the major crop and livestock produced in Iowa. Enterprise budgets give the detailed expected costs for producing a single unit (in the case of corn, an acre) of the crop.
The 2007 Corn budgets produced in January of this year can be found at http://www.extension.iastate.edu/agdm/crops/pdf/a1-20.pdf.
If you take a look at the expected costs of corn production, they range from $463.94 per acre for Low-till Corn following Soybeans to $510.60 per acre for conventional tillage corn following corn (continuous corn). The breakeven prices are $2.90 to $3.20/acre respectively. Given that some are reporting that the variable costs of corn production are up 55% for 2008 and with corn acres now selling for $6,000 to $8,000/acre based on corn price expectations, it is easy to see how the margins for corn acres are rapidly returning to their pre-ethanol and demand enhanced levels.
