The return on soybeans fares better at $150 per acre because fertilizer, seed and drying costs for soybeans are projected to be $226 per acre cheaper than for corn. 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. Obviously, risks of lower returns exist. 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. The break-even soybean price is $12.54. All https://www.barchart.com/solutions/ is provided by Barchart Solutions. Total costs are projected at $785 per acre, with $476 per acre in non-land costs and $309 per acre in cash rent. Acrevalue Inc. 50w fiber laser marking machine price. Iowa farmers averaged 205 bushels per acre on corn for grain, the Jan. 12 report noted. At 180 bushels per acre it is $3.58 per bushel. How about the amortized cost of the farm equipment? Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. The technology trend causes an upward slope of yield over time. This . 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. The silage . Seriously, Iowa grows about three times as much corn as a country like Mexico. The most recent USDA projections for 2021/22, published in October 2020, put the average US farm prices for corn and soybeans at $3.65 and $10.00. The U.S. Department of Agriculture's National Agricultural Statistics Service reported on Friday that Iowa averaged 200.0 bushels per acre for corn and 58.5 bushels per acre . The annual rate of corn yield improvement more than doubled to about 1.9 bushels per acre per year and has continued at that steady rate ever since, sustained primarily by continued improvements in genetics and crop production technologies (Fig. It is hard to trim costs so you can make a better profit if you dont know your inputs. Total costs equal non-land costs and land costs. 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. 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 <. The 2022 fertilizer costs will likely top the average fertilizer expenses of $194 . The 1964 Iowa corn yield test The average corn yield per acre has doubled during the last forty years. Depreciation is estimated at 10% of current value of the machinery. Do you want to know how much money corn farming businesses make yearly? Non-land costs are based on historical expenses on Illinois farms, updated based on current and expected input price levels. 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. Such methodological adjustment resulted in an average 6% increase in the amount of nitrogen applied to corn following corn, and an 11% increase in the amount applied to corn following soybeans. While advancements in technology make producing corn more efficient, there are still commodity markets which must be contended with. Using the average miles per gallon of a US automobile, this equates to 9,691 miles driven per acre of corn per year. Written byAlejandro Plastina,Extension Economist,plastina@iastate.edu. Woody ornamentals. . 2 0 obj 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). 2023 Meredith Corporation. For corn, land costs account for about one-third of total costs of production (Figure 2). 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. In 2023, total costs are projected at $1,161 per acre, up from the $1,054 level in 2022. Your email address will not be published. The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. Lower commodity prices are possible from any number of causes. Operating profit margin ratio - net farm income, plus interest expense, minus value of operator and family labor, divided by value of farm production. Given higher costs, break-even levels for northern Illinois for corn are $5.34 per bushel on cash rented land. The latest issue of the ISU Extension and Outreach, Estimated Costs of Crop Production, reports average cost estimates for Iowa farms in 2021, and provides guidelines to help farmers calculate their own costs of production. That is much lower than the return in 2021 when we had a record $413 per acre, and it is also above 2022 projections for returns of $156 per acre.. In a year with low-corn-price predictions, every input must be reviewed to lower the cost of production. These estimates compare to national average prices of $3.56 per bushel in 2019-2020, $3.61 per bushel for both 2018-2019 and 2015-2016 and $3.36 per bushel in both 2017-2018 and 2016-2017. There is substantial uncertainty regarding crop prices in the coming season. In 2019, Iowa farmers produced around 2.58 billion bushels of corn for grain and harvested 13.1 million acres according to the U.S. Department of Agricultural Statistics Service. 1 0 obj Those crop costs are coming from the ISU Estimated Cost of Crop Production publication released in January 2020 for corn following soybeans and soybeans following corn rotations. Central Illinois with high-productivity farmland, Central Illinois with low-productivity farmland, and. bushel higher per acre when comparing to the five-year average from 2016 to 2020. #18. Gourmet mushrooms. x=8z98[; @&bg6;bfV_de{HEv:r'@;EbIXoo.(~? Another is the Paycheck Protection Program, designed to help small businesses keep employees on the payroll and meet other costs. Non-land costs are projected to be higher in 2023 than in 2022, as is illustrated for corn grown in northern Illinois in Figure 1. Japanese maples. This is likely a phenomenon caused by price expectations. Does not include principal borrowed or repaid, sales and purchases of capital assets, or nonfarm income and expenses. endstream endobj startxref © 1995 - 2023 Farm Journal, Inc. All RightsReserved. However, a grower generally has more control over the cost of production than price. Farmer returns are projected to be lower for 2023, as is illustrated in Figure 2, which shows farmer returns for central Illinois farmland with high productivity farmland. The break-even soybean price is $12.54. Overall, with all adjustments considered, cash and economic costs per production unit remained generally steady from the 2020 budgets to the new budgets for 2021. In the livestock corn division, the average cost per acre is $206 (minimum = $186 during 1993; maximum = $235 during 1987). <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 18 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Machinery cost per crop acre - total of machinery repairs, fuel, custom machine hire, utilities, machinery depreciation and auto expense, less 75% of all custom hire income received, divided by crop acres. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. Dec 9, 2014. The United States produced 14.2 billion bushels of corn in 2019. gendergp subscription cost. An analysis of state average corn yield history data provided by the USDA NASS indicates there are two causes of corn yield (in bushel per acre) variations at the regional level in the United States. soybeans per acre, farms averaged $673 total revenue per acre and averaged $664 total cost per acre. Authors Television Broadcast average profit per acre of corn in iowa 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. 14 percent or 2.065 billion bushels of Iowa corn was exported out of the state in the 2018/19 marketing year. No other revenues are projected, giving a gross revenue projection of $567 per acre. In 2023, total costs are projected at $1,161 per acre, up from the $1,054 level in 2022, Schnitkey says. An industrial hose reel cart works great for read more. Working capital - current assets minus current liabilities. The average yield on an acre of popcorn ranges from 1,000 to 4,000 pounds of grain. To see all exchange delays and terms of use, please see https://www.barchart.com/solutions/terms. 0 Disclaimer: We request all readers, electronic media and others follow our citation guidelines when re-posting articles from farmdoc daily. Since 2013, soybeans have been more profitable than corn, albeit at much lower levels. The 2022 projected costs exceed 2021 cost of $652 per acre by $124 per acre. The estimated costs of production per bushel for corn following soybeans are $3.34, $3.31, and $3.32 for target yields of 181, 201, and 221 bushels per acre, respectively. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. Operator landowners on fully paid land will have much lower accounting costs, since the cash rent used in the report will only be an opportunity cost and not a cash cost (as it is for tenants). 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. 2021 farmer, landlord rent discussions to get interesting. Use the 68-95-99.7 Rule (Empirical Rule) to answer the following questions. Net returns per acre to herbicide-tolerant soybean production would range from $42 to $78 per acre, depending on target yield and tillage practice. Interest is not included. Non-land costs are projected to be higher in 2023 than in 2022, as is illustrated for corn grown in northern Illinois in Figure 1. Yield multiplied by price equals the total production return per acre. 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. 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. The largest proportion of costs involved in corn farming is land, fertilizer, and fixed and variable equipment. Landscaping trees and shrubs. Eligibility is determined in part by last years payroll and self-employment income. According to Iowa State it takes about 1.25 gallons of diesel fuel to cut, rake and bale per acre. Iowa has led the Nation in corn production for the last 27 consecutive years and 42 of the last 43 years. In recent years, corn profits have been significantly more volatile than in years past, thus affecting the income of farmers per acre. 1. Learn more. Take, for example, the Central CRD in Illinois. 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. Iowa produced almost 500 times more corn than Utah, which ranks #41 in US corn production by state. 1.494 billion bushels of Iowa corn in the 2018/19 marketing year went into corn processing used in the wet mill industry for food and industrials usage. Alejandro Plastina, extension economist, 515-294-6160, plastina@iastate.edu, Department of Economics 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). Given higher costs, break-even levels will be much higher. For soybeans, the yield is pegged at 55 bushels an acre with an average selling price of $8.20 per bushel. Egg prices peaked in December at around $5.43, then decreased 52% to $2.61 per dozen in February thanks to bird flu. As farmers and landowners negotiate rents for next year, Johnson said he believes 2021 could be even more challenging. Corn: 13 cents per bushel in charge; then 4 cents per month prorated daily through August 31, 2023. Start blogging about your newest farming adventures. % State Corn Yield Per Acre: Causes of Variations. A bit of luck here. Nearly 30,000 kernels of corn are planted per planted acre, and corn yields can be close to 200 bushels per acre in a good year on high CSR land. This might not be much, but with crop insurance and if you out in all the required inputs, you might break even from your corn farm. 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 . Corn production would not be profitable in a continuous corn scenario if the price per bushel is $3.65. Data for ending assets and liabilities represent those of the operator only, and do not include the value of rented land. How Much Profit Per Acre of Corn Can a Farmer Make Yearly? 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 factors that are causing those cost increases are inflation, including wages and labor, fuel and just general supply disruptions further exasperated by the Ukrainian Russian war, he says. 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. In the latest projections used for the 2021 report, corn yields are 2 bushels higher than for 2020, while soybean yields remained unchanged. 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. Copyright 1995-document.write(new Date().getFullYear()) Hunting income is available to farmers. farmdoc daily (12):106, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 19, 2022. 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. All records were kept on the accrual, or inventory, basis. Sell local honey at farmers markets. In 2023, total costs are projected at $1,161 per acre, up from the $1,054 level in. A string of great crops from 2010-2013. 1.3 Billion bushels) of winter wheat in 2019. Reference yields for corn and soybean budgets in the annual Iowa State University Extension and Outreach report reflect 30-year trend yields. Government programs to protect farmers from agriculture risk have been around for many years, Although ARC and PLC have only been around since 2014. By comparing our estimate to the USDA's data on the average rental price per acre in Kane County, we can see that this rent would be 29 percent higher than the average rent in this county. A decline in commodity price likely would not be associated with similar decreases in cost levels, reducing already narrow margins. 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. soybeans per acre, farms averaged $673 total revenue per acre and averaged $664 total cost per acre. 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. 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. 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. Member. Projections are for a return to much lower profits in 2023, continuing a pattern of rising and falling farm incomes. 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. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. A safety net under revenue will be established when projected prices for crop insurance are determined in February 2023. 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). For corn, he used an estimated yield of 198 bushels and a price of $3.20 per bushel. Sign-up for the CFAP program, through your local Farm Service Agency, is still underway. Corn is seen as a staple in the average family diet. Periods of high net incomes are following by less profitable periods which often persists for several years. The next portion of each table shows expenses on a per acre basis. (Source: USDA, Jan. 2021) Yields are set at trend levels for 2023, with trends established through historical yields. The average cost per acre in the livestock corn division is $206 (minimum = $186 in 1993; maximum = $235 in 1987). 1). Create fishing lakes or ponds for local fisherman or groups to rent. Current futures prices seem to indicate that corn and soybean prices might average $3.90 and $9.50 per bushel in 2020-21, respectively. At the landowner webinar, Kristine Tidgren, director of ISUs Center for Agricultural Law and Taxation, covered the highlights of the nearly $700 billion program. The projected corn-to-nitrogen price ratio used in the calculator amounted to 12.35. The 1964 Iowa corn yield test When breaking down the costs of production, the ISU update stated that, "For corn, land represents . Phosphorus and potassium were charged, respectively, at $.39 and $.30 per pound. Lavender farming can produce above-average profits for small growers, as it is such a versatile crop. %%EOF 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. This early in the season, Johnsons estimates are estimates, of course. At the same time, farm income was forecast to increase nationwide in 2020 (see Farm Income and Wealth Statistics for details). Agricultural price and income policy has been in place in different forms since World War I. Those break-even prices are above average prices received from 2014 to 2019 ($3.66 per bushel for corn and $9.69 for soybeans). Soybeans could trigger a $10-per-acre PLC or ARC-CO payment and CFAP would bring another $12 an acre. trade estimate of 13.68 billion and its previous estimate of 13.7 billion. 260 Heady Hall Variable costs represent just over half of the costs of production, and nitrogen and seed costs account for about 43% of the variable costs. 5598 0 obj <>stream 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