Table 3: Costs and Returns for Alfalfa Hay (New Seeding), Per Acre

PRE-PRODUCTION COSTS
ITEM	UNIT	PRICE	QUANTITY	TOTAL
Apply Calcium Fertilizer	ton	$ 27.65	1.5	$ 41.48
Soil Test	acre	$ 1.00	1	$ 1.00
Alfalfa Seed	pound	$ 3.50	18	$ 63.00
Machine Costs		$ 33.31		$ 33.31
Operator Labor	hr	$ 14.48	1.19	$ 17.23
Grain Drill		$ 3.16		$ 3.16
Total Pre-Production Costs^a				$ 159.18
^aThese costs are amortized over four production years.

PRODUCTION COSTS
ITEM	UNIT	PRICE	QUANTITY	TOTAL

Receipts
Alfalfa Hay	ton	$ 132.00	2	$ 264.00

Variable Costs				&nb sp;
Fertilizer
N	pound	$ 0.32	20	$ 6.40
P	pound	$ 0.32	120	$ 38.40
K	pound	$ 0.14	180	$ 25.20
Herbicides
Butyrac 200 (2,4-DB)	gallon	$ 36.00	0.5	$ 18.00
Eptam 7E	gallon	$ 30.60	$ 15.30
Insecticides
Cygon 400	gallon	$ 34.66	0.06	$ 2.08
Malathion 57E	gallon	$ 29.18	0.25	$ 7.30
Labor
Operator	hour	$ 14.48	2.54	$ 36.78
Seasonal Hired	hour	$ 7.24	0.5	$ 3.62
Diesel Fue l
Tractors	gallon	$ 0.969	12.83	$ 12.43
Repair & Maintenance
Tractors	acre	$ 6.29	1	$ 6.29
Implements	acre	$ 16.25	1	$ 16.25
Sub-Total	acre		1	$ 188.05
Interest on Operating Capital ^b	acre	10%	1	$ 5.45
Total Variable Costs	acre		1	$ 193.50
Returns Above Variable Costs	acre		1	$ 70.50
Fixed Costs
Tractors	acre	$ 15.73	1	$ 15.73
Implements	acre	$ 30.08	1	$ 30.08
Land Charge	acre	$ 50.00	1	$ 50.00
Pre-Production Cost Allocation	acre	8%	1	$ 47.64
Total Fixed Cost	acre		1	$ 143.45
Total Fixed and Variable Costs	acre		1	$ 336.95
Management Fees ^b	acre	7%	1	$ 31.23
Total Costs	acre		1	$ 368.18
Net Returns	acre		1	$ (104.18)

^b See text for calculation assumptions.