Company "A" is telling me their product, over dozens of trials has demonstrated an average yield increase of just over 5 bushels of corn.  Currently, I'm not doubting that.  I haven't asked yet what the cost of their product is.  Don't need to know their cost to deal with the question/questions I have.

At today's prices..... our primary market is offering a cash price of $4.28 for new crop.   Course, that market is almost exactly a 100 miles away.  

$4.28 times 5 is $21.40 of extra income per acre.  

When you guys are trying to calculate ROI for that extra 5 bushels.... what expenses are you deducting from that $21.40?  Obviously, you're deducting the cost of the product to get that additional 5 bushels.   But what else, if anything are you deducting?

1.   Are you subtracting the harvest cost for the extra five bushels?  Combine, cart, trucking to farm.  Will be minimal, but is something.
2.   Are you subtracting the drying cost and storage cost of that extra 5 bushels?
3.   Are you subtracting the trucking cost per bushel for delivering the extra 5 bushels?
4.   Are you subtracting the cost of the nutrients to grow the extra 5 bushels?  Per my "fertilizer removal app", and my costs per unit for N, P, K and sulfur.... it comes to $7.19 of fertilizer cost for those 5 bushels.  That $7.19 doesn't include the cost of the other secondary nutrients, or the micronutrients for that extra 5 bushels of corn.


Am I wrong to deduct the above costs to figure ROI for company "A's" product?  Can you think of anything else I'm forgetting to subtract?


I don't know.... maybe I'm just in a bad mood.   But I'm becoming less enthused to try to gain another 5 bushels, when it's likely the cost to get the 5 bushels might be "breakeven" at best.  Bad mood or no bad mood... if it doesn't pencil out, I probably shouldn't be doing it.



Just curious what thoughts all of my AgTalk friends might have with this question.


thanks for your replies,

gordon