While market prices of corn and soybeans are lower at present than they have been in the past few years, they still produce the best return on a per acre basis than almost any of the other commodity crops, though rice and peanuts have been looking pretty good for the past year or two.
USDA estimates of U.S. crop returns per acre reveal large differences in crop profitability across commodities and over time during 2010-13. Returns to crop production are defined as the gross value of production less total economic costs. Total economic costs include operating costs such as seeds, fertilizer and pesticides; the capital recovery cost for machinery and equipment; and the costs — known as opportunity costs — of employing land, labor, capital and other owned resources that have alternative uses.
While returns to total economic costs for corn, soybeans, rice and peanuts were positive, on average, for the 2010-13 period, average returns for other major crops were negative. For most crops, changes in farm prices and the gross value of production per acre, rather than changes in production costs, have driven returns to total economic costs. Lower prices contributed to reduced returns for corn, soybeans, wheat, sorghum and peanuts in 2013, while price and yield increases improved returns for oats and rice.
The negative returns over total economic costs for some crops indicate that that those producers realized a lower rate of return to their land, labor and capital than the benchmark rates of return used in ERS commodity cost and returns accounts; returns over operating costs alone were positive for all crops throughout the period.
This chart is based on data found in USDA's Commodity Costs and Returns.