Economic Research Service
1
United States
Department
of Agriculture
www.ers.usda.gov
Electronic Report from the Economic Research Service
Statistical
Bulletin
Number
974-5
July
2002
Characteristics and Production
Costs of U.S. Wheat Farms
Mir B. Ali 1
In this report… The average cost of producing a
bushel of wheat was $3.97 for producers surveyed in
1998, ranging from about $1.25 to more than $6 per
bushel. The cost of producing wheat generally declined as
farm size increased. Regional differences in production
practices and growing conditions were major influences
on production costs and yields among wheat producers.
Producers in the Prairie Gateway, a major wheat region,
produced wheat at an average cost of $3.63 per bushel,
the lowest cost among regions. Most high-cost farms and
very large farms were in the Southeast region; these
farms tended to be more diversified than farms in other
regions, so wheat contributed a smaller share to their total
farm income.
Keywords: Wheat, costs of production, cost variation,
input use, production practices, farm characteristics,
Agricultural Resource Management Study.
1Agricultural Economist, Resource Economics Division, Economic
Research Service, USDA
Overview
2
Economic Research Service
Wheat is the principal cereal grain crop used for
food consumption in the United States and most
of the world. In terms of value of production and
planted acreage, wheat is typically the Nation's
fourth largest field crop. Only corn, hay, and
soybeans are more important. Wheat is also a
leading U.S. export crop, with exports
accounting for almost half of total wheat
production. U.S. wheat farmers are facing many
challenges despite a strong domestic market
demand for wheat products. Many wheat
farmers are not able to cover all of their
production costs, even after Government
payments are added to their income.
Wheat land area has dropped from the early
1980s because of declining returns relative to
other crops and alternative options under
Government programs. The price of wheat has
dropped