extension field specialist
Iowa State University Extension and Outreach
Article reprinted with permission from Ag Decision Maker.
This publication contains estimates of production costs for common livestock enterprises in Iowa. Estimates are intended to reflect average or above average levels of management using common types of technology. Input prices reflect expected average price levels during the year.
These budget tables are presented in the accompanying "pdf" file that you can access by clicking here.
Enter projected estimates for input and sale prices. Suggested input prices are shown on page 2 in the accompanying "pdf" file that you can access by clicking here. Suggested sale prices are shown in Information File Livestock Planning Prices.
Data were drawn from farm record summaries, feed consumption research and price projections, and are intended to be used for planning purposes only. For individual farms, expected costs and input requirements based on past results should be substituted whenever possible.
Each budget contains estimates of the following types of costs:
Fixed Costs. Costs that will occur regardless of the level of production each year. They generally include such things as depreciation, interest, taxes, and insurance on facilities, breeding livestock, and livestock equipment and facilities. Depreciation is assumed to be 8 percent of the original value of facilities and equipment annually. Interest averages one-half the original value of facilities over its lifetime, or 5 percent annually. Taxes and insurance add 1 percent for a total of 14 percent of the original investment annually for fixed costs.
Variable Costs. Costs that vary according to the level of production. Interest is calculated on feed and other variable costs for one-half the production period.