Economics of Corn Farming Final
Economics of Corn Farming Final
Economics of Corn Farming Final
MARKETING OF CORN
PRODUCTION”
a. Organic
1. Use of Organic Fertilizers 2,300.00
2. Bio-N - Use of Bio-N 360.00
3. weedicide 1,850.00
4. Use of trichogramma 360.00
6. Sacks & Twine 1,500.00
Sub-Total 23,370.00
B. Labor Inputs
Plowing 3,600.00
Planting 1,750.00
Organic Matter Application 500.00
Side dressing 500.00
Spraying 600.00
Furrowing 1,600.00
Harvesting 3,275.00
In-field Hauling 2,700.00
Shelling & Drying 4,875.00
Sub-Total 19,400.00
C. Interest Expense
D. Total Cost of Production 42,770.00
E. Yield (kgs/Ha) 5,000
F. Farm Gate Price (Php/kg) 13.00
G. Gross Returns 65,000.00
H. Net Returns 22,230.00
OPV Corn
A. Material Inputs
1. Seeds 1,000.00
2. Fertilizer 3,000.00
a. Organic
1. Use of Organic Fertilizers 2,300.00
2. Bio-N - Use of Bio-N 360.00
3. weedicide 3,000.00
4. Use of trichogramma 360.00
6. Sacks & Twine 1,300.00
Sub-Total 11,320.00
B. Labor Inputs
Plowing 3,600.00
Planting 1,750.00
Organic Matter Application 500.00
Side dressing 500.00
Spraying 600.00
Furrowing 1,600.00
Harvesting 2,400.00
In-field Hauling 2,160.00
Shelling & Drying 2,080.00
Sub-Total 13,610.00
C.Interest Expense -
D. Total Cost of Production 24,930.00
E. Yield (kgs/Ha) 5,000
F. Farm Gate Price (Php/kg) 3,000.00
G. Gross Returns 39,000.00
H. Net Returns 14,070.00
R&D Information : Economics of the Corn
Industry in Ilocos Norte *
Generator: MMSU
• Description: This study was conducted to
determine the economics of corn industry
in Ilocos Norte in 2005. Specifically, it
attempted to determine 1) the personal
and farm profile of the respondents; 2) the
area planted and volume of production of
corn in the province; 3) the demand and
supply of corn in the province; 4) the trend
of average production and prices of corn in
the province;
• 5) analyze the cost and returns of
producing corn; and 6) the problems
encountered by the respondents along
pre-production, production, post
production, and marketing.
Findings:
• Corn farmers in Ilocos Norte were in their middle
adulthood, married with an average household
size of five members. The respondents did not
attain high level of education and their main
source of income was farming.
• A total of 12,320 ha was planted with corn in
Ilocos Norte in the year 2005. The larger area
was devoted to yellow corn (7,200 ha) while
white corn accounts for around 42% (5,120 ha)
of the total area.
white corn accounts for around 42%
(5,120 ha) of the total area.
• A total production of 49,988 mt of corn
was produced. Yellow corn accounts 70%
(35,16 mt) of the total production and the
remaining 30% (14,872 mt) was white
corn.
• Yield averaged 4.06 mt ha-1 for both corn
types. The yield for yellow corn was 4.88
mt ha-1 while white corn was only 2.9 mt
ha-1.
• Demand for corn was 57,374 mt, of which
79% (45,562.05 mt) was from the livestock
and poultry feed industries (yellow corn),
and the remaining 21% (11,811.95 mt)
was from the cornick industry. The total
supply was 49,988 mt or a shortage of
7,386 mt to meet the demand.
• Prices follow the demand and supply, and
the prices offered by wholesale traders
and feed millers in terminal markets.
White corn was much expensive (P9.45
kg-1) than yellow corn (P7.71 kg-1).
• At 4.88 mt ha-1 yield of corn, total
production cost was P34,678.54 with a net
income of P2,978.41. White corn incurred
a net loss of P9,265.76 due to the high
production cost of P36,983.27 and the
yield of 2.9 mt ha-1.
* Enterprise Budgets*
• One of the best tools for planning
purposes is an enterprise budget
• Enterprise budgets predict profitability by
incorporating quantities and prices of all
inputs and outputs.
• Enterprise budgets are started by
estimating the expected corn production in
kilograms per hectare and the expected
price received
• These are all stated on a per hectare
basis.
• Gross returns are calculated by multiplying
the expected yield per hectare by the
expected price
• Expenses are divided into variable and
fixed costs by whether the expense varies
as the size of the enterprise changes
• The last item for the variable costs is an
interest charge
• When the crop is sold, the money is
returned. If the money is borrowed, this is
the actual interest expense.
• When the farmer’s own equity is used, this
cost is an opportunity cost since the
money could have been earning interest
• The difference between gross returns and
total expenses is the return to operator
labor, land, capital, and management
• The return to operator labor and
management is compensation for the
farmer’s time and expertise invested in
growing a corn crop.
• The return to land and capital is an
opportunity cost for using the land and
other capital.
• Because the farmer has equity invested in
the land, those funds cannot be earning
interest in a bank or used for other
purposes
• Determining prices and quantities is
probably the most difficult aspect of
building a corn budget. Input prices can be
readily obtained from many
agribusinesses
• Good production records can provide
information about yields and about how
much fertilizer and chemicals normally are
used.
Partial Budgets
• Enterprise budgets are great for showing
how an enterprise contributes to
profitability
• However, sometimes a producer might be
interested in examining how some
adjustment to an enterprise or combination
of enterprises affects profitability.
• Examples include selling corn on cobs or
shelled corn
• Partial budgeting is a good tool for these
situations because only those costs
incomes, and resource needs that change
with a proposed adjustment are examined
• Partial budget analysis is a three step
process.
• Step one determines what increases the
profits of the farm business when a
change is implemented.
• Step two determines what decreases the
profits of the farm business.
• This step compares the increase in profits
from step one to the decrease in profits
from step two
“MARKETING OF CORN “
• Marketing of farm products involves
activities which facilitate the movement of
products from the farms to the ultimate
users.
• Prof. Philip Kotler, a marketing expert,
defines marketing as a set of human
activities directed at facilitating and
consummating exchange.
Functions of Marketing
• Assembling- gathering and consolidating
of small quantities of products into larger
lots.
1. Reduces transportation cost
2.Economizes the cost of grading
3.Helps in product processing
4.Facilitates in filling specific orders of
customers
•
Storage. The keeping of products over a
period of time in a warehouse, cold storage
plant, or other storage facilities. Its
advantages are the following:
• Maintains an adequate supply for processing
• Takes advantage of expected increase in
prices
• Preserves the products, especially the
perishables
• Improves the quality of certain products
such as tobacco, wine, etc.
• Regulates the flow of supply, thus
minimizing price fluctuations
Financing- This is the use of credit by
middlemen for their operation
• To buy seasonal farm products,
middlemen must have adequate funds for
the necessary cash advances to the
farmers. Usually, they give loans or down-
payments to the farmers in order to
acquire priority in buying the products.
• To maintain a continuous supply, some
farm produce are kept in storage until
these are needed for processing or while
waiting for higher prices.
• To make cash advances for seasonal
expenses which are needed in moving the
farm products to the users.
• To secure needed equipment, it may be
better to obtain a loan.
Standardizing and grading- The sorting of
products based on kind, quality, and size
is called grading. The establishment of
these grades is standardization.
The advantages of grading are the following:
• The need for inspection of the product by
buyers is reduced or eliminated.
• The sale of the product by description is
made easier.
• Cost of transportation is reduced.
• Appearance of the product is improved
and therefore commands a better price.
C O N S U M E RS
• POULTRY/ HOG RAISER
CONSUMER GROCERIES
• (SARI-SARI)
• STORE RETAILER
• POULTRY
• SUPPLY OR FEED MIX
• STORE
THANK YOU and MERRY CHRISTMAS
TO EVERYONE