The models point to substantial cost increases in 2023, says Gary Schnitkey, University of Illinois Extension ag economist. The lower projected profits in 2023 result from much higher costs and projected lower commodity prices than 2021 and 2022. The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. Over time, corn yields have increased an average of 2.0 bushels per acre, while soybean yields have increased by .5 bushels per acre. The tables are calculated on a per acre basis. Projected returns range from $13.50 per acre for dryland corn to $194.55 per acre for irrigated corn. Return on assets - net farm income, plus interest expense, minus value of operator and family labor, divided by total farm assets owned. Average costs per bushel have been $1.26 to $1.74 in the cash grain division, and $1.13 to $1.81 in the dairy and livestock division. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. Only farms with sales of $100,000 or more were counted in making the weighting. For related content and insights from industry experts, sign up for Successful Farming newsletters. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. The average cost per acre has been $238 (minimum = $215 during 1995; maximum = $260 during 1992). 3: How much better is this field than the county average? The increase between the five and ten-year averages is because the very high prices of the drought years (2011-2013) are added in. bushel higher per acre when comparing to the five-year average from 2016 to 2020. Total non-land costs for corn are estimated at $420 an acre and for soybeans at $266 an acre. History suggests that low prices would not lead quickly to lower costs, as costs typically exhibit lags in adjustments. corn takes the worst figure in the study to the third best at $144 per acre profit . corn yields are coming in anywhere from 130 bushels per acre 776 Math Specialists. Value of farm production - value of crops produced (at market price), livestock production (net of feed and purchased livestock), inventory value gain or loss, and miscellaneous income. As of Friday, $130 billion hadnt been spent, Tidgren said. In 2019/2020, Iowa corn growers grew an average of 178 bushels per acre. Have a specific question for one of our subject experts? If your fuel cost last year was $2.50/gallon and this year it is $5.00/gallon it will only cost you a little over $3 more per acre and if you get 2 tons/acre first cutting, .How Much Does it Cost to Ship Cattle? You list seed costs as the same for corn after corn rotation as corn after soybeans. An analysis of state average corn yield history data provided by the USDA NASS indicates there are two causes of corn yield (in bushel per acre) variations at the regional level in the United States. Egg prices peaked in December at around $5.43, then decreased 52% to $2.61 per dozen in February thanks to bird flu. More details on 2023 budgets are available in the management section of farmdoc through two documents: Schnitkey, G. and K. Swanson. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. If YES, here is an analysis of the income & profit margin corn farmers make per acre. %PDF-1.6 % previous year's 2.58 billion bushels. 14 percent or 2.065 billion bushels of Iowa corn was exported out of the state in the 2018/19 marketing year. If water requirements are met with a good irrigation system and other cultural practices optimized, sweet corn yields can be up to 7 to 8 tons per acre or 2,000 dozen. In the latest projections used for the 2021 report, corn yields are 2 bushels higher than for 2020, while soybean yields remained unchanged. For 2019, a 63 bushel per acre yield and $9.00 per bushel price are used in projections, giving $567 of crop revenue. All records were kept on the accrual, or inventory, basis. hbbd```b``"_HRD2I V&%T$/"9;@h$-"%H`f3N$_ j6@ d-z 260 Heady Hall Yields are set at trend levels for 2023, with trends established through historical yields. Decision Tools on the Ag Decision Maker website, ISU cost of production estimates for 2021, https://www.youtube.com/watch?v=xuxGMkKuzeE. 5598 0 obj <>stream Because of industrial, seed, planting, and other kinds of modifications, what used to take days to plant can now be done in minutes. Reference yields for corn and soybean budgets in the annual Iowa State University Extension and Outreach report reflect 30-year trend yields. At $75 per ton, that's an extra $40 per acre in profit to the grower. Total costs equal non-land costs and land costs. equals the gross return per acre. But farmers also must maintain a production level that will result in profitable returns. For central Illinois high-productivity farmland, we are projecting an average return of $25 per acre for a corn-soybean rotation, Schnitkey says. At the same time, farm income was forecast to increase nationwide in 2020 (see Farm Income and Wealth Statistics for details). Corn seed costs have increased 74% since the inception of the contest in 1987. {\U{f~uoos;h?zYQ HUoTn>'?{GYHY S|DB?QBZ?Bj+W?=}(]'+?L p?8Pv' B5UFWVTM}UJ9{QGQ4tOygp9 z,OloloKOlfo+V} \f>8t&^U `H198R00t(0TM Up!X ['SMezWgop%B R 1&[UMSi4!k Zm]4#7{qmS7v;lW->b.%I zv9 1.3 Billion bushels) of winter wheat in 2019. An industrial hose reel cart works great for read more. The average of all farms in each table represents a weighted average of the values for each size group listed. The most recent USDA projections for 2021/22, published in October 2020, put the average US farm prices for corn and soybeans at $3.65 and $10.00. However, futures prices are currently reflecting a market reaction to unexpected USDA production and stocks figures, and they could retrench fast once the market reassess the real impact of the new information. The average corn profit since 1968 has been $0.05/bu, however in the last 5 years the cost to price margin was, on average, -$0.05/bu, if this average is extended to 10 years the average corn profit per bushel is $0.49/bu. Variable costs: Fuel, fertilizer, seed, irrigat. Return on equity - net farm income minus value of operator and family labor, divided by net worth. The season average price for corn, projected in USDAs most recent supply and demand estimates, is $3.20, well below the $3.70 reference price that triggers PLC payments. Since 2020, total costs have increased from $833 per acre to $1,161, an increase of $328 per acre, or 39%. For a detailed statement, please see the University of Illinois Copyright Information and Policies here. trade estimate of 13.68 billion and its previous estimate of 13.7 billion. Machinery cost per crop acre - total of machinery repairs, fuel, custom machine hire, utilities, machinery depreciation and auto expense, less 75% of all custom hire income received, divided by crop acres. The first release of the 2023 Illinois Crop Budgets is available on farmdoc. Corn stocks down, soybean stocks down from year earlier While commodity prices are projected lower, those prices still are not low by historical standards. Government programs to protect farmers from agriculture risk have been around for many years, Although ARC and PLC have only been around since 2014. The average flat rate in 2020 for harvesting wheat was $24.96 per acre, a decrease of $0.26 from $25.22 per acre in 2018. How many farmers know what their inputs are, let alone their costs per acre or per bushel? Sac county had the largest year-over-year increase of 5.8 bushels per acre while Plymouth County saw the largest decrease of . More than 200 counties across the Corn Belt had county average rental rates above $200 per acre, with . County yields ranged from 37.9 bushels per acre in Decatur County to 69.1 bushels per acre in Scott County. Overall, with all adjustments considered, cash and economic costs per production unit remained generally steady from the 2020 budgets to the new budgets for 2021. Use the 68-95-99.7 Rule (Empirical Rule) to answer the following questions. Friday, an Iowa State University (ISU) farm management specialist told landowners that all of any profits farmers earn this year on corn will be due to those payments and that even with federal help, soybeans will lose an average of $15 an acre. Total costs are projected at $785 per acre, with $476 per acre in non-land costs and $309 per acre in cash rent. These returns are for a typical 50% corn and 50% soybean rotation in central Illinois. 1.494 billion bushels of Iowa corn in the 2018/19 marketing year went into corn processing used in the wet mill industry for food and industrials usage. Answer (1 of 4): The answer varies from farm to farm, field to field and year to year. %PDF-1.5 10 Most Profitable Specialty Crops to Grow Lavender. Additionally, what used to take days to plant can now be done in minutes. However, vegetable processors choose the hybrid, provide seed of that hybrid, and set the population size. where did the 198,870 kWh per acre in Iowa come from? Sell local honey at farmers markets. For soybeans, the yield is pegged at 55 bushels an acre with an average selling price of $8.20 per bushel. He estimates the average cash rent in Iowa this year at $222 per acre, which has changed little over the past four years. The most profitable farm made $275 per acre while the least profitable lost $222 per acre. For 2023, much higher prices than average historical prices are needed to maintain some profitability. U.S. corn production is unchanged from the previous month at 14,506.8 million bushels, based on a national average yield of 175.8 bushels per acre. 2021 farmer, landlord rent discussions to get interesting. Land costs are based on projected cash rents. However, a grower generally has more control over the cost of production than price. When using the ISU cost of production estimates for 2021, keep several things in mind. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. Obviously, risks of lower returns exist. Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. 5552 0 obj <> endobj Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. Cost of production estimates for herbicide tolerant soybeans amount to $9.16, $8.94 and $8.74 per bushel for target yields of 50, 56, and 62 bushels per acre, respectively. In the livestock corn division, the average cost per acre is $206 (minimum = $186 during 1993; maximum = $235 during 1987). That's anywhere from $2,500 to more than $10,000 per acre gross profit! Woody ornamentals. Even with those, the net return on beans is projected at a negative $15 an acre. The factors that are causing those cost increases are inflation, including wages and labor, fuel and just general supply disruptions further exasperated by the Ukrainian Russian war, he says. The key points to remember when growing popcorn is to make sure it doesn't cross pollinate with other corn you may be growing. (Source: USDA, Jan. 2021) The state average is 1,000 to 1,200 dozen per acre or 200 to 240 crates . There is a lot of corn grown each year in the United States. For farmers, that self-employment income is reported on their income tax Schedule F. Because many farmers didnt report income last year, PPP, administered by the Small Business Administration, hasnt been as useful as CFAP, Tidgren said. ", 2023 Crop Budgets: Higher Costs and Lower Returns, Revenue and Costs for Illinois Grain Crops, Revenue and Costs for Illinois Grain Crops, Actual for 2015 through 2021, Projected 2022, Nitrogen Fertilizer Outlook for 2023 Decisions, Corn and Soybean Prevent Plant and the Dakotas, Department of Agricultural and Consumer Economics, Department of Agricultural, Environmental and Development Economics. The projected season-average farm price is unchanged at $4.00 per bushel. The Census Data Query Tool (CDQT) is a web based tool that is available to access and download table level data from the Census of Agriculture Volume 1 publication. The largest proportion of costs involved in corn farming is land, fertilizer, and fixed and variable equipment. The return on soybeans fares better at $150 per acre because fertilizer, seed and drying costs for soybeans are projected to be $226 per acre cheaper than for corn. For corn following soybeans, the following targets were used to figure the gross revenue estimate of slightly more than $600 per acre for a farmer who has 50% crop loss. In fact, there was a farm in Dubuque County that sold on June 1st for $30,600/acre! Start blogging about your newest farming adventures. Corn has been grown across the United States and other parts of the world for hundreds of decades. Want more news on this topic? These farm record data are presented in the accompanying "pdf" file that you can access by clicking here or on the icon above. We use a great deal of rope for odd jobs around the farm and at various community events. Working capital - current assets minus current liabilities. Another is the Paycheck Protection Program, designed to help small businesses keep employees on the payroll and meet other costs. Gross income = $950 / acre 4. Agricultural price and income policy has been in place in different forms since World War I. Cost of production in 2018 is predicted to be $645 per acre . Actual costs can be entered in the column for Your Estimates, or by using the electronic spreadsheet Decision Tools on the Ag Decision Maker website. Corn is seen as a staple in the average family diet. Corn costs were much smoother than prices. 1). Nitrogen price is projected stable at $.34 per pound in 2021, but total nitrogen costs are projected to go up by 6 to 11% reflecting the higher application rates recommended by the ISU Corn Nitrogen Rate Calculator. In an average year, Iowa produces more corn than most COUNTRIES! I do believe there will be some interest in lowering that fixed rent, Johnson said. Variable costs represent just over half of the costs of production, and nitrogen and seed costs account for about 43% of the variable costs. How can I make money with 10 acres? USDA projections for 2020-2021, published in October 2019, put the average U.S. farm prices for corn and soybean at $3.40 and $8.85. Watch this video with Gary Schnitkey, University of Illinois ag economist: 3 Strategies to Manage Around High Fertilizer Prices, 5 Considerations for Rising Prices and Cost of Production in 2022, Three precision ag features lead the updates being made to John Deeres 7, 8 and 9 Series Tractors for the new model year. A central Illinois corn farmer will make a $24 per acre profit in 2022 after paying for inputs and land costs, according to the latest crop budgets from the University of Illinois. At 160 bushels per acre, it is $4.03. Corn yields were maximized near a final stand of 33,000 plants per acre and were not reduced as plant population increased to 44,000 plants per acre. Very large or small farms may have lower or higher fixed costs per acre. However, it is great that you are reviewing the budget line by line and adjusting our state average estimates to reflect the specifics of your operation. No other revenues are projected, giving a gross revenue projection of $567 per acre. As farmers and landowners negotiate rents for next year, Johnson said he believes 2021 could be even more challenging. Your email address will not be published. x=8z98[; @&bg6;bfV_de{HEv:r'@;EbIXoo.(~? With an average direct cost of $751 per acre of corn and $900 in sales, the farmer has about $149 left. The 2020-2021 national average corn price, which will be finalized on Sept. 30, is now estimated at $4.40 per bushel. It's important to note that there was only 200 acres was family land that was purchased, at a slight discount to appraised value. 1. Corn: 13 cents per bushel in charge; then 4 cents per month prorated daily through August 31, 2023. Units Nitrogen, $0.83 per pound 167 138.61 177 146.91 187 155.21 Phosphate, $0.75 per pound 63 47.25 69 51.75 77 57.75 5578 0 obj <>/Filter/FlateDecode/ID[<8A85A9343CE4BC4388299899869A550C>]/Index[5552 47]/Info 5551 0 R/Length 121/Prev 259394/Root 5553 0 R/Size 5599/Type/XRef/W[1 3 1]>>stream The U.S. Department of Agriculture's National Agricultural Statistics Service reported on Friday that Iowa averaged 200.0 bushels per acre for corn and 58.5 bushels per acre . Take, for example, the Central CRD in Illinois. The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. The Estimated Costs of Crop Production use average corn seed prices paid by farmers in Fall 2020 around the state in both corn budgets, so our budgets do not disaggregate seed traits. Learn . Values of $187, $222, and $256 per acre rent charges for the low, medium, and high quality land were assumed. A projected $5.30 corn price for 2023 compares to a $3.66 price from 2014 to 2019. 2 0 obj The average yield in their database is 60 bushels (beans) and 204 bushels (corn). hb```b``fb`e`0ed@ Aa,Y 4>hNem}AS1d03r3yU b<4,dPC765b/N`` r::y;L}/X8Q!7j0c|xq)f$=x>dC1^ ]< LK@&q;k !|HJ``*5 |pU_D u Z!, To maximize profit, research shows Minnesota growers need a final stand of 32,000 to 34,000 plants per acre (Figure 1), although this varies with the cost of seed and corn price. This is $20 per acre lower than 2019. Average cost per bushel has been between $1.25 and $1.95 in the cash corn division and $1.13 and $1.81 in the livestock corn division. In recent years, corn profits have been significantly more volatile than in years past, thus affecting the income of farmers per acre. During the prolonged and excessive rainfall that fell on a good portion of the U.S. in 2018, the Southeast, portions of Iowa, and the Upper Midwest had more than 60 inches of rainfall, resulting in increased abandonment rates and many unharvested acres of corn. Seed and fertilizers amount to 44% of variable costs. In this scenario, soybean production would only be profitable for operations with medium and high yields, but the profitability margins could be very tight (Figure 3). Hunting income is available to farmers. This early in the season, Johnsons estimates are estimates, of course. The top portion of each table shows income. Some speculate this could become a trend based on a hypothesis in how the disease is transmitted. M. The Quick Stats Database is the most comprehensive tool for accessing agricultural data published by NASS. Iowa State University Extension and Outreach, Managing farm costs key to profitability in 2021. <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 18 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> The total cost per bushel of soybeans is projected at $8.72 for non-herbicide-tolerant beans at 56 bpa, according to the report.". Revenue and Costs for Illinois Grain Crops, Actual for 2015 through 2021, Projected 2022. Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, August 2, 2022. Your email address will not be published. The hemp -derived CBD market is projected to top $23 billion by 2023, according to the Hemp Cultivation Landscape study conducted by the Brightfield Group. The Guide also reports expected variable costs of $403 per acre. Futures: at least 10 minute delayed. And those optimum populations increased yield of marketable ears by an average of 0.53 tons per acre. Net returns per acre to herbicide-tolerant soybean production would range from $42 to $78 per acre, depending on target yield and tillage practice. The governmental agency estimated corn production at 13.77 billion bushels vs. the avg. Producers must have a strong grasp of their own production costs, and the ISU Extension report provides a step-by-step guide to help them estimate break-even costs, and serves to benchmark operations and trigger relevant questions on how to better manage enterprise costs. Weighting factors are based on the number of farms in each size group in the state, as computed from the most recent Census of Agriculture. Yields are set at trend levels for 2023, with trends established through historical yields. From 2000 to 2012, farmer returns averaged $148 per acre for corn and $95 per acre for soybeans. Interest rates, energy prices, and wage rates continue to increase, and supply issues that began in Covid have not been resolved. I do think were going to see more interest in flex rents, Johnson said. The highest returns are in central Illinois with high-productivity farmland, with farmer returns of $8 for corn and $43 per acre for soybeans. Dec 9, 2014. Sell plant seeds online. There is substantial uncertainty regarding crop prices in the coming season. For the 2020 crop year, USDA estimates U.S. corn yield to be 181.8 bushels per acre , surpassing the previous record-setting estimate of 178.5 bushels per acre earlier this year. Still, you can apply up through June 30 at your bank or Farm Credit System lender that is participating in the program. Create fishing lakes or ponds for local fisherman or groups to rent. CFAP isnt the only corona virus-related program that farmers might be able to use. Farmer returns are projected to be lower for 2023, as is illustrated in Figure 2, which shows farmer returns for central Illinois farmland with high productivity farmland. Special Tabulations and Restricted Microdata, 02/15/23 Still time to respond to the 2022 Census of Agriculture, USDA to follow up with producers who have not yet responded, 02/15/23 Still time to respond to the 2022 Puerto Rico Census of Agriculture, USDA to follow-up with producers who have not yet responded (Puerto Rico - English), 01/31/23 United States cattle inventory down 3%, 01/30/23 2022 Census of Agriculture due next week Feb. 6, 01/12/23 Corn and soybean production down in 2022, USDA reports