Posts

Showing posts with the label central Illinois

Above Trend Yields or Higher Prices Needed to Break-Even in 2018

read farmdocDaily article

Farmers figuring crop budgets for this year will face an uncomfortable reality. In order to break-even on cash rented land, generally speaking, it will require above trend yields, higher prices, or some combination of the two.



2018 is shaping up very much like the last two years says University of Illinois Agricultural Economist Gary Schnitkey. Each of them began with dire price and income outlooks. Higher than average trend yields financially salvaged what were expected to be very poor seasons on highly productive soils in central Illinois. FBFM (Farm Business Farm Management) records show farmers in this area of the state harvested 228 bushel corn and 69 bushel soybeans on average in 2016 and, while the numbers have not yet been fully summarized, project 2017 yields at 221 and 68.



Since 2012 corn and soybean yields in central Illinois have been at or above trend. The weather and management will need to produce another year of above-trend yields in order for cash grain farmers to break even again this year.



U of Illinois’ Gary Schnitkey calculates break even will require a $3.97 average cash corn price with a trend yield of 202 bushels to the acre. If the average yield is 229, then the average break even cash price would be $3.50. The figures for soybean are $9.85 at the 61 bushel trend and $8.84 with a 68 bushel yield.

Soybeans More Profitable than Corn

read blog post

Soybeans have been more profitable than corn over the last three years, and an ILLINOIS agricultural economist expects that to continue to be the case this year and next.



Gary Schnitkey has updated crop budgets for highly productive central Illinois farmland. It shows, as was the case in 2013, 2014, 2015, & 2016, that planting soybeans will make farmers more money than planting corn this year and in 2018. The cash price of corn will need to exceed $4.00 a bushel if that is to change, at least with soybeans in the high $9.00 a bushel range. Schnitkey in his farmdocDaily article, you can find that online, says there are four points to be aware of as it relates to the 2017 and 18 crop budgets.
  1. first, these can change as expected yields and price evolve
  2. second, repeating this, corn needs to be above four bucks if it is to really compete
  3. third, total returns from highly productive central Illinois soils won’t be as much this year as in 2014, 15, or 16.
  4. fourth and finally - cash flows are likely to be very tight this year and next.