5552 0 obj <> endobj Value of farm production - value of crops produced (at market price), livestock production (net of feed and purchased livestock), inventory value gain or loss, and miscellaneous income. This measures the total production per farm. For soybeans, the yield is pegged at 55 bushels an acre with an average selling price of $8.20 per bushel. A lot more money is coming from the government than probably any time in the last 20 years, says Steve Johnson, a farm and ag business management specialist with ISU. Answer (1 of 4): The answer varies from farm to farm, field to field and year to 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. A safety net under revenue will be established when projected prices for crop insurance are determined in February 2023. holding off on buying and working with what I have. for the fresh market and 4 to 6 tons per acre for processing. Farm Bureau members may subscribe for a free email news service, featuring the farm and rural topics that interest them most. where did the 198,870 kWh per acre in Iowa come from? Click Image to Enlarge Changing Use Impacts Corn and Soybean Returns Since 2020, total costs have increased from $833 per acre to $1,161, an increase of $328 per acre, or 39%. Agricultural price and income policy has been in place in different forms since World War I. ", 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. 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. If water requirements are met with a good irrigation system and other cultural practices optimized, sweet corn yields can be up to 7 to 8 tons per acre or 2,000 dozen. The estimated cost of production for continuous corn is $3.88 per bushel for a target yield of 166 bushels per acre, and it goes down to $3.82 for target yields of 184 and 202 bushels per acre. Timing of purchases. Hunting income is available to farmers. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. Keep in mind that for the buyer, harvest costs for silage would be different than harvest costs for grain. For 2020, the state of Illinois had an average soybean yield of 60 bushels per acre and an average corn yield of 192 bushels per acre. Your email address will not be published. Yields are set at trend levels for 2023, with trends established through historical yields. The average corn yield in the United States was estimated at a record 177 bushels per acre, 5.6 bushels above the 2020 yield of 171.4. For soybeans, with $621 in income, total direct costs are $485. We use a great deal of rope for odd jobs around the farm and at various community events. 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. Adding miscellaneous income (straw, crop insurance, etc.) 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. To answer you have to make a lot of assumptions. This . The deadline is August 28. The 2023 farmer return is projected to be close to the average from 2013 to 2019 when the return averaged $29 per acre. No other revenues are projected, giving a gross revenue projection of $567 per acre. Based on these numbers, corn is estimated to return about $155 per acre and beans will return about $70. 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. Contact a specialist. The rest of expected federal payments will be from CFAP, at about $30 an acre. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. 518 Farm House Lane These variations impact US state corn production.. Each is important for creating an accurate corn yield forecast. 3 0 obj Net farm income, accrual - cash net income adjusted for inventory changes and accrued expenses. Farm Business Association data on farm family living expenses. Schnitkey, G., K. Swanson, N. Paulson, C. Zulauf, J. Coppess and J. Baltz. . Those break-even price are above average prices received from 2014 to 2019: $3.66 per bushel for corn and $9.69 for soybeans. Additionally, there seems to be reactionary trend for costs to prices the year before. Seed and fertilizers amount to 44% of variable costs. 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. State Averages Total costs to produce corn for all combined areas of the state were $868 per acre. However, higher expected corn yields over a 30-year trend for 2021 suggest that on a per bushel basis, costs would increase by 1.0% 2.6% to remain below their 2019 marks (Figure 1). 1 0 obj 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. While 2023 is projected to be profitable, risks exist. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. In 2019/2020, Iowa corn growers grew an average of 178 bushels per acre. % Given higher costs, break-even levels will be much higher. bushel higher per acre when comparing to the five-year average from 2016 to 2020. The United States produced 14.2 billion bushels of corn in 2019. The average cost per bushel has been between $1.25 and $1.95 in the cash corn division and $1.13 and $1.81 in the livestock corn division. The increase between the five and ten-year averages is because the very high prices of the drought years (2011-2013) are added in. Your email address will not be published. As of Friday, $130 billion hadnt been spent, Tidgren said. Loans can be made through June 30 and this is money available, Tidgren said. For example, if the custom rate for chopping, hauling and storing silage is $10.00/ton, the value of the standing silage to the buyer is reduced to $41.23 - $10.00 = $31.23 per ton, or $624.60 per acre. Total non-land costs for corn are estimated at $420 an acre and for soybeans at $266 an acre. 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. 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 technology trend causes an upward slope of yield over time. The lowest returns are projected for southern Illinois, with farmer returns of -$63 per acre for corn and -$61 per acre for soybean. If YES, here is an analysis of the income & profit margin corn farmers make per acre. Garlic. The 2022 fertilizer costs will likely top the average fertilizer expenses of $194 . All records were kept on the accrual, or inventory, basis. 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 production would not be profitable in a continuous corn scenario if the price per bushel is $3.65. Want more news on this topic? A string of great crops from 2010-2013. 1). Net returns per acre to herbicide-tolerant soybean production would range from $42 to $78 per acre, depending on target yield and tillage practice. Nitrogen price is projected stable at $.34 per pound in 2021, but total nitrogen costs are projected to go up by 6 to 11% reflecting the higher application rates recommended by the ISU Corn Nitrogen Rate Calculator. As farmers and landowners negotiate rents for next year, Johnson said he believes 2021 could be even more challenging. Overall, costs have increased dramatically since 2020, from $577 to $860, an increase of $283 per acre, or a 49% increase. In an average year, Iowa produces more corn than most countries. Also included in the formula were revenue protection (RP) insurance at the 80% level . In fact, there was a farm in Dubuque County that sold on June 1st for $30,600/acre! With an expected harvest price of $3.65, the anticipated market revenue is $657 per acre. Learn . It is difficult to predict corn-production economics. 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. NREL . This is likely a phenomenon caused by price expectations. We're still protecting positive returns for 2023 but there are risks. Return on equity - net farm income minus value of operator and family labor, divided by net worth. It appears you're visiting this site with a browser that is old and unsupported. ~ Providing Timely, Accurate and Useful Statistics in Service to U.S. Agriculture ~, County and District Geographic Boundaries, Crop Condition and Soil Moisture Analytics, Agricultural Statistics Board Corrections, Still time to respond to the 2022 Census of Agriculture, USDA to follow up with producers who have not yet responded, 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), 2022 Census of Agriculture due next week Feb. 6, Corn and soybean production down in 2022, USDA reports The 2023 crop budgets are based on projected input cost levels, trendline corn and soybean yields and per-bushel prices of $5.30 for corn and $12.75 for 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. In this scenario, production of herbicide tolerant and non-herbicide tolerant soybean would be profitable for all target yields considered in the report. 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. 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. Contract grazing: A flat rate is paid per animal per month or per day by the livestock owner to the landowner. Section 207(f)(2) of the E-Government Act of 2002 requires federal agencies to develop an inventory of information to be published on their Web sites, establish a schedule for publishing information, make those schedules available for public comment, and post the schedules and priorities on the Web site. First, fertilizer and lime costs include volume and early purchase discounts. Alejandro Plastina, extension economist, 515-294-6160, plastina@iastate.edu, Department of Economics That's anywhere from $2,500 to more than $10,000 per acre gross profit! "Cost of production estimates, per bushel, for herbicide-tolerant soybeans are $8.89, $8.72 and $8.57 assuming 50, 56, and 62 bushels per acre, respectively. Government programs called Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) can help farmers protect against the risks of weather and prices. The state average soybean yield was 58.5 bushels per acre, down 4.5 bushels from 63.0 bushels per acre last year. Sign-up for either ARC or PLC for 2020 is still underway until June 30 but most farmers have already opted for PLC for corn base acres and likely ARC-CO on soybeans. The first round of 2023 Illinois Crop Budgets released by the University of Illinois show a clear trend of higher costs and lower returns. On rented farms, only operator income and expenses were recorded. Non-land costs for 2019 are projected at $369 per acre, an increase of $15 per acre over 2018 costs. Operating profit margin ratio - net farm income, plus interest expense, minus value of operator and family labor, divided by value of farm production. Total costs equal non-land costs and land costs. At the landowner webinar, Kristine Tidgren, director of ISUs Center for Agricultural Law and Taxation, covered the highlights of the nearly $700 billion program. How about ag-chem and the application costs some of which might be biannual. All rights reserved. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. The budgets are for four regions of Illinois (northern Illinois, central Illinois with high-productivity farmland, central Illinois with low-productivity farmland and southern Illinois). <> Like non-land costs, can rents have increased since 2020, increasing from $256 per acre up to $301 per acre, an increase of $45 per acre, or 18%. How Much Profit Per Acre of Corn Can a Farmer Make Yearly? The top portion of each table shows income. stream © 1995 - 2023 Farm Journal, Inc. All RightsReserved. The models point to substantial cost increases in 2023, says Gary Schnitkey, University of Illinois Extension ag economist. The break-even soybean price is $12.54. Knowing costs is key, as it is to understand the assumptions behind the budgets used in the calculations. At a Farmland Owners Update webinar, Johnson said he estimates that Iowa farmers, on average, will receive about $95 an acre in federal payments for the 2020 corn crop. 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This compares to U.S. corn yields of 172 bushels per acre in 2020, 167.4 bushels per acre in 2019, 176.4 bushels per acre in 2018 and the current record U.S. average . Yield = 190 bushels per acre on average (US Midwest) 3. hbbd```b``"_HRD2I V&%T$/"9;@h$-"%H`f3N$_ j6@ d-z Because of industrial, seed, planting, and other kinds of modifications, what used to take days to plant can now be done in minutes. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. Livestock returns per $100 feed fed - value of livestock production minus livestock purchases, divided by value of feed fed, multiplied by 100. Yield multiplied by price equals the total production return per acre. The average flat rate in 2020 for harvesting wheat was $24.96 per acre, a decrease of $0.26 from $25.22 per acre in 2018. From 2000 to 2012, farmer returns averaged $148 per acre for corn and $95 per acre for soybeans. 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 <. Net returns to corn following soybeans would range from $55 to $74 per acre under conventional tillage, and average $82 and $75, respectively, under strip tillage and no-till. %PDF-1.5 The average cost per acre has been $238 (minimum = $215 during 1995; maximum = $260 during 1992). farmdoc daily (12):106, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 19, 2022. In 2023, total costs are projected at $1,161 per acre, up from the $1,054 level in 2022, Schnitkey says. For corn, Johnson estimates a PLC payment of $65 an acre. Soybeans are projected to be more profitable in all regions of Illinois (see Table 1). 2021 farmer, landlord rent discussions to get interesting. The average corn yield per acre has doubled in the last forty years. Iowa State University Extension and Outreach, Managing farm costs key to profitability in 2021. To see all exchange delays and terms of use, please see https://www.barchart.com/solutions/terms. 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. Annual production costs for established alfalfa or alfalfa-grass hay as well as a budget for maintaining grass pastures are included. do champions league winners get automatic qualification. Data for ending assets and liabilities represent those of the operator only, and do not include the value of rented land. Guidelines are available here. The tables are calculated on a per acre basis. Take, for example, the Central CRD in Illinois. Iowa's corn for grain yield is estimated at 178 bushels per acre. But farmers also must maintain a production level that will result in profitable returns. To continue using this site and its features, you will need to use a newer browser. Cost of production in 2018 is predicted to be $645 per acre . Over time, corn yields have increased an average of 2.0 bushels per acre, while soybean yields have increased by .5 bushels per acre. Many farmers purchased fertilizer for 2022 before much of the price increase in fall and early winter of 2021. 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). Soybeans: 14 cents per bushel The base rate bushels increased in 2020 for wheat harvesting compared to that reported in 2018. x=8z98[; @&bg6;bfV_de{HEv:r'@;EbIXoo.(~? Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. The projected season-average farm price is unchanged at $4.00 per bushel. endobj The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. Management return - accrual net farm income less 4% interest on value of equity (net worth), and wages for operator and family labor.