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. Area harvested for grain is estimated Corn for silage production is estimated at 5.33 million tons, down 33% from 2019. All rights reserved. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. And in some years, growing corn may not be the best option. The Guide also reports expected variable costs of $403 per acre. At a Farmland Owners Update webinar, Johnson said he estimates that Iowa farmers, on average, will receive about $95 an acre in federal payments for the 2020 corn crop. The soybean price of $8.20 is only 20 under the soybean reference price of $8.40. Another grower and customer favorite is Elephant garlic, whose large, mild cloves bring $6-$8 per pound. For soybeans, he estimates smaller federal payments of $32 an acre. Return on assets - net farm income, plus interest expense, minus value of operator and family labor, divided by total farm assets owned. holding off on buying and working with what I have. "pdf" file that you can access by clicking here. A string of great crops from 2010-2013. Yield multiplied by price equals the total production return per acre. endstream endobj 5553 0 obj <>/Metadata 97 0 R/Names 5580 0 R/Outlines 114 0 R/Pages 5548 0 R/StructTreeRoot 118 0 R/Type/Catalog/ViewerPreferences<>>> endobj 5554 0 obj <. As shown in Table 2, most costs are projected to increase. 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. Ames, IA 50011-1054. The farm record data utilized in this report were obtained from the Iowa Farm Business Association. While 2023 is projected to be profitable, risks exist. The break-even price to cover total costs less other revenue for soybean in 2022 is projected at $11.06 per bushel. Opportunities to price at those levels do not exist currently. Lavender farming can produce above-average profits for small growers, as it is such a versatile crop. Seriously, Iowa grows about three times as much corn as a country like Mexico. The latest issue of the ISU Extension and Outreach, Estimated Costs of Crop Production, reports average cost estimates for Iowa farms in 2021, and provides guidelines to help farmers calculate their own costs of production. Corn costs were much smoother than prices. There is substantial uncertainty regarding crop prices in the coming season. Iowa State University Extension and Outreach, Managing farm costs key to profitability in 2021. For all regions of Illinois, the relatively high returns experienced in recent years are projected to end in 2023. The next portion of each table shows expenses on a per acre basis. In the livestock corn division, the average cost per acre is $206 (minimum = $186 during 1993; maximum = $235 during 1987). 3: How much better is this field than the county average? Iowa's corn for grain yield is estimated at 178 bushels per acre. This is likely a phenomenon caused by price expectations. The first round of 2023 Illinois Crop Budgets released by the University of Illinois show a clear trend of higher costs and lower returns. Explore Statistics By State By Subject Crops and Plants Demographics Economic and Prices Environmental Livestock and Animals Research, Science, and Technology Charts and Maps For soybeans, with $621 in income, total direct costs are $485. The top portion of each table shows income. do champions league winners get automatic qualification. Land costs are based on projected cash rents. The largest proportion of costs involved in corn farming is land, fertilizer, and fixed and variable equipment. Alejandro Plastina, extension economist, 515-294-6160, plastina@iastate.edu, Department of Economics farmdoc daily (12):106, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 19, 2022. Corn production would not be profitable in a continuous corn scenario if the price per bushel is $3.65. <> At the farm level, the study predicts it could mean over $40,000 per acre in revenue, depending on quality and yield. Interest rates, energy prices, and wage rates continue to increase, and supply issues that began in Covid have not been resolved. 2023 Meredith Corporation. Thats exactly what we want all farmers doing to estimate their own costs of production! 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. 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 In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. 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. 5552 0 obj <> endobj The average corn yield per acre has doubled in the last forty years. Variable costs represent just over half of the costs of production, and nitrogen and seed costs account for about 43% of the variable costs. All Rights Reserved. He estimates the average cash rent in Iowa this year at $222 per acre, which has changed little over the past four years. When using the ISU cost of production estimates for 2021, keep several things in mind. The deadline is August 28. stream endstream endobj startxref Corn has been grown across Iowa for more than 150 years, nearly 30,000 kernels are planted per acre, and corn yields can be close to 200 bushels per acre in a good year on high CSR land. 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). Return on equity - net farm income minus value of operator and family labor, divided by net worth. How Much Profit Per Acre of Corn Can a Farmer Make Yearly? Offer indoor or outdoor storage. The average of all farms in each table represents a weighted average of the values for each size group listed. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. Overall, costs have increased dramatically since 2020, from $577 to $860, an increase of $283 per acre, or a 49% increase. Net farm income, cash - total sales and other cash income minus cash expenses, including purchases of livestock and feed. How to Write a Community Garden Business Plan [Sample Template], 10 Best Agricultural Crops That are Most Profitable Per Acre, How to Write a Hemp Processing Plant Business Plan [Sample Template], How to Start a Cut Flower Business in 19 Steps, How to Start a Tea Farm Sample Business Plan Template, How to Start a Peanut Farm Sample Business Plan Template, How to Start a Cucumber Farm Sample Business Plan Template, How to Start a Plantain Farm Sample Business Plan Template, How to Start a Sunflower Farm Sample Business Plan Template, How to Start an Avocado Pear Farm Sample Business Plan Template. There is a lot of corn grown each year in the United States. The annual rate of corn yield improvement more than doubled to about 1.9 bushels per acre per year and has continued at that steady rate ever since, sustained primarily by continued improvements in genetics and crop production technologies (Fig. I do think were going to see more interest in flex rents, Johnson said. 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. Having considered all variables, experts have come to the conclusion that farms averaged $673 total revenue per acre and averaged $664 total cost per acre. It is hard to trim costs so you can make a better profit if you dont know your inputs. Dec 9, 2014. The lowest returns are projected for southern Illinois, with farmer returns of -$63 per acre for corn and -$61 per acre for soybean. Does not include principal borrowed or repaid, sales and purchases of capital assets, or nonfarm income and expenses. 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. Additionally, what used to take days to plant can now be done in minutes. These returns are for a typical 50% corn and 50% soybean rotation in central Illinois. Willows . Several notes concerning the budgets shown in Table 1 are: Farmer returns represent the amount remaining for the farmer after paying all financial costs, with a land charge at the average projected cash rent. 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ISU used a a corn yield target of 200 bu./acre with an average price of $3.10 per bushel. Another is the Paycheck Protection Program, designed to help small businesses keep employees on the payroll and meet other costs. Farm Bureau members may subscribe for a free email news service, featuring the farm and rural topics that interest them most. Create fishing lakes or ponds for local fisherman or groups to rent. By comparing our estimate to the USDA's data on the average rental price per acre in Kane County, we can see that this rent would be 29 percent higher than the average rent in this county. Some speculate this could become a trend based on a hypothesis in how the disease is transmitted. Copyright 1995-document.write(new Date().getFullYear()) 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. Are you getting any. 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. In an average year, Iowa produces more corn than most countries. The 2023 farmer return is projected to be close to the average from 2013 to 2019 when the return averaged $29 per acre. Those differences are not likely to change normal rotational decisions. Japanese maples. The biggest is that corn and soybean prices decline, and costs do not-- an event that could happen.. Johnson expects federal payments to come from two main sources, the farm bill programs of ARC (Agriculture Risk Coverage) and PLC (Price Loss Coverage) and from extraordinary payments meant to cushion losses from the economic effects of the coronavirus. Cost of production in 2018 is predicted to be $645 per acre . Total costs of corn and soybean production per acre are expected to increase, respectively, by 2.1% 3.4% and 2.6% in 2021. 4 0 obj Written byAlejandro Plastina,Extension Economist,plastina@iastate.edu. For northern Illinois, the break-even corn price is $5.34 per bushel on cash rented land. © 1995 - 2023 Farm Journal, Inc. All RightsReserved. Net farm income, accrual - cash net income adjusted for inventory changes and accrued expenses. How about ag-chem and the application costs some of which might be biannual. trade estimate of 13.68 billion and its previous estimate of 13.7 billion. Use the 68-95-99.7 Rule (Empirical Rule) to answer the following questions. It will take nearly all of that to reach Johnsons projected net return to the farmer of $86.60 an acre for corn. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. ", 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. It is difficult to predict corn-production economics. 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. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. The state average soybean yield was 58.5 bushels per acre, down 4.5 bushels from 63.0 bushels per acre last year. Nationally, the average is 172 bushels per acre. However, the only certainty about future prices is that they will continue to change until their expiration date, and they could plummet as fast as they rallied. Schnitkey, G., K. Swanson, N. Paulson, C. Zulauf, J. Coppess and J. Baltz. 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. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. For soybeans, the yield is pegged at 55 bushels an acre with an average selling price of $8.20 per bushel. Until that point, the risks of low returns from price declines will be large. The 1964 Iowa corn yield test The average corn yield per acre has doubled during the last forty years. Interest is not included. Total costs equal non-land costs and land costs. The projected corn-to-nitrogen price ratio used in the calculator amounted to 12.35. Client Corner: Where can I find average prices for corn and soybeans? Across FBFM farms , farmer returns for corn averaged $8 per acre in 2018, with an average yield of 237 bushels per acre, and an average price of $3.60 per bushel . All records were kept on the accrual, or inventory, basis. Gross revenue (market revenue plus government payments), variable cost, and overhead cost per acre for rotation corn on average productivity soil is illustrated in Figure 2.