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Projected Net Incomes on Illinois Grain Farms in 2019 and 2020

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by Gary Schnitkey, ILLINOIS Extension

Due to lower corn and soybean yields, 2019 net farm incomes on Illinois grain farms are projected to decline more than $80,000 per farm from 2018 levels. The low yields are partially offset by higher corn and soybean prices and higher MFP payments in 2019 as compared to 2018. Incomes in 2020 are projected to be negative if yields are at trend levels and Market Facilitation Program (MFP) payments do not occur.

Historic Net Incomes on Illinois Grain Farms
Figure 1 shows average yearly net incomes on grain farms enrolled in Illinois Farm Business Farm Management (FBFM). These net incomes are averages across all grain farms in Illinois. Size, tenure relationships, and financial structures vary across these farms. Many farms are below 1,000 tillable acres, and some farms have over 8,000 acres. Over time, the size of farms has grown. In 2018, the average number of tillable acres was around 1,500 acres.



As can be seen in Figure 1, there are three distinc…

Adding the Costs of Conservation to a Farm Lease

Farmers and landowners alike are wanting to try more conservation practices. Todd Gleason reports the timing and amount of nitrogen applications along with the use of cover crops can all be written into a farm lease.

farmdoc farm lease page link

(1) Soil Health and Conservation Addendum

The Soil Health and Conservation Addendum is for a landowner who seeks to reach clear understanding with the farm-tenant about practices on the land under lease. The addendum is a fillable pdf and the parties can negotiate the specific provisions to include in the addendum, memorializing the agreement by selecting the specific provisions. The provisions and fillable pdf are designed to be additive: each selected provision will be incorporated in the lease agreement.
Included among the provisions that can be selected are those for tillage practices and cover crop practices. There are also specific provisions pertaining to other conservation efforts that may be present on the farmland, such as ditches, ve…

Tidbits from the ILLINOIS Fam Tax School

Farmers generally try to get their taxes in order before the end of the year. This season they may need to consider MFP and Prevented Plantings payments and how to best make charitable contributions. The tax implications of the MFP payments are that the money is taxable in the year it is received. One-half of the MFP payment has already been or will be delivered shortly. It is expected 25% will be delivered in a second check in November. And if needed the third check, another 25% of the total, is likely to come in January. The first two checks are taxable in 2019, and the final portion would be taxable in 2020. Another payment farmers may not be used to dealing with involves the Prevented Planting portion of crop insurance says Bob Rhea, “Those payments are either taxable when received, or under certain circumstances, could be delayed until 2020 the year after the disaster occurred. So, they should visit with their tax professional as they determine, especially as we near year end, wh…

Have Soybean Prices Put in a Low

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The price of soybeans may have put in a seasonal low but there are a lot of factors at play. Todd Gleason has more on what farmers should do with University of Illinois Agricultural economist Todd Hubbs.

September 16, 2019
by Todd Hubbs, University of Illinois

Last week’s price rally in the soybean market relied on the prospects of easing trade tensions with China. The potential for soybean prices to maintain recent momentum depends on developments in trade negotiations and production prospects for both the U.S. and South America.



USDA’s September soybean production forecast came in at 3.633 billion bushels, down 47 million bushels from the August forecast. Yield per harvested acre fell by 0.6 bushels per acre to 47.9 from the August forecast of 48.5. Compared to the August forecast, yield prospects for the top ten states in soybean acreage increased in Missouri and Kansas. Yield prospects declined in Illinois, Iowa, Minnesota, Indiana, and South Dakota. North Dakota, Nebraska, and Ohi…

MFP Impact on 2019 through 2023 Incomes and Financial Positions

read farmdocDaily postMarket Facilitation Program (MFP) payments in 2019 of $50 per acre will reduce financial erosion on farms. Still, incomes for 2019 are projected to be over $100,000 lower than 2018 incomes.

2019 Northern Illinois Crop and Prevent Plant Budgets in July

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by Gary Schnitkey, University of Illinois
link to farmdocDaily article

Overall, projections suggest low returns for corn, soybeans, and prevent plant acres in Northern Illinois, an area that has been hard hit with wet weather, delayed planting, and prevent planting. Corn and soybean returns are projected to be lower than any year going back to 2000, even after including significant Market Facilitation Program (MFP) payments and estimates of crop insurance payments at an 85% coverage level. Corn prevent planting returns are higher than corn returns given current estimates of harvest-time prices, although both results in a loss on average cash rented land. Soybean returns are expected to be better than soybean prevent plant returns, which are very low. As with corn, both soybean scenarios result in a loss on average cash rented land.


Current projections of prices and yields result in negative returns for Northern Illinois, an area that has experienced a large amount of wet weather that ha…

June Acreage Report Heightens Uncertainty

by Todd Hubbs, University of Illinois Extension
link to farmdocDaily article and videoOn June 28, the USDA released the Acreage and Grain Stocks reports. While the Grain Stocks report provided support for both corn and soybeans, the Acreage report indicated higher than expected corn acres and lower than expected soybean acres. The acreage numbers injected a substantial amount of uncertainty into both markets that appears set to stay in place throughout the summer.
The 2019 June USDA Acreage Report rocked the corn market. University of Illinois Agricultural Economist Todd Hubbs explores those numbers in this interview with ILLINOIS Extension Farm Broadcaster Todd Gleason.A dramatic drop in principal crop acreage provided one of the many surprises in the Acreage report released on Friday. Driven by much lower soybean and wheat acreage, total principal crop acreage came in at 309.3 million acres, down 6.1 million acres from the March Prospective Planting report. Principal crop acreage esti…