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Revision of 2020 Corn and Soybean Budgets

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The new trade deals have caused Gary Schnitkey to update the price outlook for the 2019 and 2020 growing seasons. As you’ll hear from Todd Gleason this really didn’t change much in the #ILLINOIS crop budgets for corn or soybeans.

by Gary Schnitkey, ILLINOIS Extension Agricultural Economist
link to farmdocDaily article

Budgets for 2020 have been revised and are now available on farmdoc. Revised budgets use a corn price of $3.90 per bushel and soybean price of $9.10 per bushel, both of which are an increase in price expectations following what appears to be softening of trade difficulties between China and the U.S. Even at those prices, returns are projected at negative levels for 2020. Before 2020 returns are positive, yields must be well above trend or Market Facilitation Program payments must continue in 2020.

Corn Returns Table 1 shows 2018 actual returns for both corn and soybeans grown on high-productivity farmland in central Illinois. These values are summarized from farms enrolle…

Waiting for the Trade Deal

The highly anticipated release of USDA’s crop production and ending stocks reports last Friday created a somewhat negative tone in corn and soybean markets. Despite the slightly bearish tilt, prices for both commodities closed higher on Friday. The pending phase one trade agreement and South American production prospects look to set the tone for prices over the near term. - Todd Hubbs, ILLINOIS Extension


by Todd Hubbs, University of Illinois
link to original farmdocDaily article

Corn production for the U.S. in 2019 came in at 13.69 billion bushels, up 31 million bushels from the previous forecast on higher national average yields. Average corn yield of 168 bushels per acre is one bushel higher than the previous forecast. The harvested acreage estimate of 81.5 million acres is down from the November forecast of 81.8 million acres. Current production estimates for corn show eight percent of the crop still in the field and open the estimate to possible revision in the future.

December 1 …

Hog Numbers are Up & Profits Should Come

The number of hogs being raised in the U.S. has been going up since mid–2014. However, it isn’t necessarily because profits are great. The last Hogs and Pigs report released by USDA, back in December, was a record-setter at 77 million 338 thousand. That’s three-percent more than year ago. The expansion comes despite unprofitable margins and uncertainties related to trade issues says Jason Franken of Western Illinois University. The fact is there will be more hogs going to market from January to May. One of the reasons, Franken says, is that the litter size has grown on average and is now over 11 piglets per sow, “The continuation of the upward trend in pigs per litter, combined with reported farrowing intentions suggests more hogs going to market in 2020.” Winter farrowing intentions are up 1 percent from actual farrowings last year and 5% from two years ago. The spring farrowing intentions are also up slightly from last year and up 3 percent from 2 years back.All of these numbers poi…

Conservation Reserve SignUp Opens

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enroll at your local FSA

USDA's Conservation Reserve Program signup opens December 9 & closes February 28, 2020. There are currently 22 million acres in the program with room for 27 million. This map shows how acres enrolled decreased nearly 13 million from 2007 to 2016.



FSA has updated soil rental rates for CRP. Rates are statutorily prorated at 90 percent for continuous signup and 85 percent for general signup.

Use this link to download an Excel spreadsheet from USDA with the county rates.

MFP Payments and 2020 Cash Rents

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MFP payments have had impacts on land rental rates. Moreover, uncertainty about the continuation of MFP in 2020 presents issues in setting cash rental rates. Given this uncertainty, we present the idea of setting cash rents at appropriate levels given the price and yield environment, likely lower than 2019 cash rent rates, with contingencies for cases in which MFP payments occur. By doing this, base cash rent is set at a level that allows the farmer to generate profits and leaves open the option for both parties to benefit if MFP payments occur in 2020.

by Gary Schniteky, ILLINOIS Extension
link to farmdocDaily article

Market Facilitation Program (MFP) payments have served as a significant source of revenue on grain farms in 2018 and 2019. Without MFP payments, average farmer returns would be negative in 2019, and far below any level since consistent records began in 2000. Without MFP payments, 2020 returns are projected to be negative. It is unknown at this time if MFP payments will o…

WILLAg IFES Post

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2019 was a truly historic and in many ways unbelievable year for Illinois agriculture. The ongoing trade war with China and the on- and off-again efforts to reach an agreement dominated headlines much of the year. As if this wasn’t enough uncertainty for one year, Illinois was hit by one of the wettest spring planting seasons on record. Looking forward, the story of Illinois agriculture will continue to be one of managing volatility and financial difficulties. The stress of a prolonged period of low corn, soybean, and wheat prices, was amplified for producers experiencing low yields this year due to poor planting and summer growing season weather. Producers and landowners continue to face a series of difficult management challenges as they grapple with adjusting to this highly volatile economic environment. What is the prospect for a recovery in grain prices? Should cash rents be lower? And if so, how much? How much will government programs offset some of the financial stress? The mem…

Register for the Illinois Farm Economic Summits

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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…