Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Written byAlejandro Plastina,Extension Economist,plastina@iastate.edu. Egg prices peaked in December at around $5.43, then decreased 52% to $2.61 per dozen in February thanks to bird flu. We use a great deal of rope for odd jobs around the farm and at various community events. Fuel and insecticide costs, interest expenses on pre-harvest input financing, and crop insurance premiums are projected lower in 2021. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. These farm record data are presented in the accompanying "pdf" file that you can access by clicking here or on the icon above. Even with those, the net return on beans is projected at a negative $15 an acre. Other than 160 acres purchased this year, he aquired this land 10+ years ago at an average land cost under $2,000/acre. Garlic. With the many types of flex rents, the landowner usually takes a lower fixed payment than with cash rents, in exchange for sharing a percentage of the farms positive returns. The lowest returns are projected for southern Illinois, with farmer returns of -$63 per acre for corn and -$61 per acre for soybean. The average yield of corn (bushels per acre) for Iowa counties during 2022 follows a bell-shaped (symmetric and unimodal) distribution with a mean of 180 bushels per acre and a standard deviation of 24 bushels per acre. 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. While advancements in technology make producing corn more efficient, there are still commodity markets that must be contended with to make the industry more profitable. The average cost per acre has been $238 (minimum = $215 during 1995; maximum = $260 during 1992). In a year with low-corn-price predictions, every input must be reviewed to lower the cost of production. 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. corn takes the worst figure in the study to the third best at $144 per acre profit . Agricultural price and income policy has been in place in different forms since World War I. hb```b``fb`e`0ed@ Aa,Y 4>hNem}AS1d03r3yU b<4,dPC765b/N`` r::y;L}/X8Q!7j0c|xq)f$=x>dC1^ ]< LK@&q;k !|HJ``*5 |pU_D u Z!, Working capital - current assets minus current liabilities. Agricultural price and income policy has been in place in different forms since World War I. Given higher costs, break-even levels will be much higher. The total cost per bushel of soybeans is projected at $8.72 for non-herbicide-tolerant beans at 56 bpa, according to the report.". This typically happens in agriculture after a period of higher returns, we return to those lower returns, he says. Corn stocks down, soybean stocks down from year earlier Soybeans could trigger a $10-per-acre PLC or ARC-CO payment and CFAP would bring another $12 an acre. Livestock returns per $100 feed fed - value of livestock production minus livestock purchases, divided by value of feed fed, multiplied by 100. 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. 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. A bit of luck here. Davis Michaelsen and Editor Brian Grete discuss this week's market action From conventional horizontal tillage to strip-till and no-till, the key is applying a production system that can overcome each fields weakness. State Averages Total costs to produce corn for all combined areas of the state were $868 per acre. Costs are projected to increase in 2023 from 2022 levels. 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. In any case, farm operators can always improve their profitability or limit losses by focusing on managing costs and using their break-even estimations to implement a tailored marketing plan. 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. If you thinking of going into the corn farming business and are worried about what your income would look like, or you are just plain curious, we would try to provide an estimate of the profit that can be had per acre of farmed corn. Net farm income, accrual - cash net income adjusted for inventory changes and accrued expenses. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. Client Corner: Where can I find average prices for corn and soybeans? In fact, there was a farm in Dubuque County that sold on June 1st for $30,600/acre! The average cost per acre in the livestock corn division is $206 (minimum = $186 in 1993; maximum = $235 in 1987). Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021-22, respectively. The wage rate used for operator labor was $2,500 per month. The tables are calculated on a per acre basis. 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. Quick Stats Lite provides a more structured approach to get commonly requested statistics from our online database. Domestic use, exports, and ending stocks are also unchanged for 2020 /21. soybeans per acre, farms averaged $673 total revenue per acre and averaged $664 total cost per acre. previous year's 2.58 billion bushels. Until that point, the risks of low returns from price declines will be large. Your email address will not be published. He estimates the average cash rent in Iowa this year at $222 per acre, which has changed little over the past four years. This helped in seeking the demand of people more than the previous 40 years. Iowa State University This measures the total production per farm. corn and 59 bu. 710,250 miles. No other revenues are projected, giving a gross revenue projection of $567 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. In the corn divisions, depending upon year, the average maximum and minimum cost per acre is $215 to $260 in the cash grain division, and $187 to $234 in the dairy and livestock division (Table 1). 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. For northern Illinois, the break-even corn price is $5.34 per bushel on cash rented land. Only farms with sales of $100,000 or more were counted in making the weighting. That's anywhere from $2,500 to more than $10,000 per acre gross profit! History suggests that low prices would not lead quickly to lower costs, as costs typically exhibit lags in adjustments. 0 The silage . Be ready for a big profit swing for 2023 to the downside. The largest proportion of costs involved in corn farming is land, fertilizer, and fixed and variable equipment. But despite this volatility, corn farmers are still making some good profit from their corn farms, depending on the yield of that year. The most recent release, September 2019, showed county-level rental rates for non-irrigated cropland ranging from less than $10 per acre in several Western states to more than $250 per acre across portions of the Corn Belt in Illinois and Iowa. Brazil became the second country in the world after Argentina to approve planting of GMO wheat, following a decision by the nations biosecurity agency CTNbio. Additionally, there seems to be reactionary trend for costs to prices the year before. An average corn fertilizer program in Southern Minnesota is expected to cost about $250 to $300 per acre in 2022, as compared to an estimated $140 per acre in 2021 and $121 per acre in 2020, based on South Central College (SCC) Farm Business Management (FBM) data. Another is the Paycheck Protection Program, designed to help small businesses keep employees on the payroll and meet other costs. 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. %%EOF Many farmers purchased fertilizer for 2022 before much of the price increase in fall and early winter of 2021. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. The Quick Stats Database is the most comprehensive tool for accessing agricultural data published by NASS. The Ukraine-Russia war has further clouded the outlook and worsened supply chain issues. At 180 bushels per acre, it is $3.58 per bushel. In 2023, total costs are projected at $1,161 per acre, up from the $1,054 level in 2022, Schnitkey says. So any change requires processor buy-in. Thats exactly what we want all farmers doing to estimate their own costs of production! Net farm income, cash - total sales and other cash income minus cash expenses, including purchases of livestock and feed. The increase between the five and ten-year averages is because the very high prices of the drought years (2011-2013) are added in. Do you want to know how much money corn farming businesses make yearly? The 2023 farmer return is projected to be close to the average from 2013 to 2019 when the return averaged $29 per acre. 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 Illinois Central CRD has a 210.4 bushel per acre average corn yield, a 64.0 bushel per acre soybean yield, and a 3.29 corn-to-soybean yield ratio (3.29 = 210.4 corn yield / 64.0 soybean yield). Corn and soybeans futures prices have recently rallied to their highest levels in years, providing hope for a market-driven profitable 2021 crop year. For 2023, much higher prices than average historical prices are needed to maintain some profitability. Interest is not included. In an average year, Iowa produces more corn than most countries. Those break-even prices are above average prices received from 2014 to 2019 ($3.66 per bushel for corn and $9.69 for soybeans). 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. Keep in mind that for the buyer, harvest costs for silage would be different than harvest costs for grain. Management return - accrual net farm income less 4% interest on value of equity (net worth), and wages for operator and family labor. In recent years, corn profits have been significantly more volatile than years past. Ways to Make Money Off Your Land Almost Immediately Rent plots to groups looking to build a community garden. However, the differences in crop returns are relatively small. Winter Wheat Seedings up for 2023, 12/13/22 NASS to publish milk production data in updated data dissemination format, 11/28/22 USDA-NASS Crop Progress report delayed until Nov. 29, 10/28/22 NASS reinstates Cost of Pollination survey, 09/06/22 NASS to review acreage information, 09/01/22 USDA NASS reschedules 2021 Conservation Practice Adoption Motivations data highlights release, 05/06/22 Respond Now to the 2022 Census of Agriculture, 08/05/20 The NASS Mission: We do it for you, 04/11/19 2017 Census of Agriculture Highlight Series Farms and Land in Farms, 04/11/19 2017 Census of Agriculture Highlight Series Economics, 04/11/19 2017 Census of Agriculture Highlight Series Demographics, 02/08/23 Crop Production (February 2023), 01/31/23 Cattle & Sheep and Goats (January 2023), 12/23/22 Quarterly Hogs and Pigs (December 2022), 12/15/22 2021 Certified Organics (December 2022), Talking About NASS - A guide for partners and stakeholders, USDA and NASS Anti-Harassment Policy Statement, REE Reasonable Accommodations and Personal Assistance Services, Safeguarding America's Agricultural Statistics Report and Video, Agriculture Counts - The Founding and Evolution of the National Agricultural Statistics Service 1957-2007, Hours: 7:30 a.m. - 4:00 p.m. Eastern Time Monday - Friday, except federal holidays Toll-Free: (800) 727-9540, Hours: 9:00 a.m. - 5:30 p.m. Eastern Time Monday - Friday, except federal holidays Toll-Free: (833) One-USDA Price. Unless farm operators use futures or options to create a floor for their crop prices, current future prices might foster a false sense of security. On rented farms, only operator income and expenses were recorded. 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. <>>> of Science and Technology stream document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 1995-document.write(new Date().getFullYear()) Price = $5.00/bushel 2. He expects another CFAP-like payment could be comingbut will likely use the 2020 planted acres. Iowa's corn for grain yield is estimated at 178 bushels per acre. 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. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Schnitkey, G., K. Swanson, C. Zulauf and J. Baltz. Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. The first round of 2023 Illinois Crop Budgets released by the University of Illinois show a clear trend of higher costs and lower returns. At projected cost levels, per bushel prices of $5.30 for corn and $12.75 for soybeans result in marginal profitability, similar to levels experienced from 2014 to 2019. Soybeans: 14 cents per bushel The base rate bushels increased in 2020 for wheat harvesting compared to that reported in 2018. Sell local honey at farmers markets. It doesn't appear that farmland prices are slowing down anytime soon either with the steady increase in prices as seen in the graph above. Return on assets - net farm income, plus interest expense, minus value of operator and family labor, divided by total farm assets owned.