December 1, 2016

Which State Had The Highest Cost of Production in 2016?

 |  By: Anna-Lisa Laca

While unimpressive milk prices have given farmers plenty of heartburn this year, forgiving prices for corn and alfalfa have kept the cost of production relatively low allowing farmers to hang in there on small margins. Every six months USDA calculates the average cost of production per state. 

USDA's total cost equation includes the following: purchased feed, homegrown harvested feed, grazed feed, veterinary and medicine, bedding and litter, marketing, custom services, fuel, lube and electricity, repairs, other operating costs, interest on operating capital, hired labor, opportunity cost of unpaid labor, capital recovery of machinery and equipment, opportunity cost of land, taxes and insurance, and general farm overhead.

Idaho claimed the title of lowest cost of production state in 2016 at $16.64/cwt. Kentucky saw the highest cost of production at $42.33. There was a $25.69 difference between Kentucky and Idaho. Idaho's feed cost was the lowest at $10.49/cwt, the lowest total feed cost at $12.73/cwt, and the lowest total overhead costs at $3.91/cwt.