Susan Winsor

March 20, 2014

12 Slides

Count on half the revenue this year and next compared to 2011-12, advises a leading farm management expert. Gary Schnitkey, University of Illinois Extension farm management economist, lays out a variety of $4-4.50 corn price and $11-11.10 soybean price scenarios to guide your decisions.

Longer term, the new outlook from the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) predicts $4 corn for 2015 through 2024, and $9.82 soybeans for 2015 through 2023.

Schnitkey’s bottom-line outlook below is framed for various Illinois land-productivity categories that also apply across the Corn Belt. Plug in your own figures, rotation and planting-date scenarios on his Excel spreadsheet.

  • Adding soybeans back to a continuous-corn rotation can add $29-134 per acre to your total bottom line, depending upon how productive your land is, at $4 corn and $11 beans.

  • It will take a 4-5-bushel yield increase to justify a $20/acre input decision (such as a spraying).

  • On high-productivity farmland, 2014 soybeans will be more profitable than 2014 corn. This is contrary to 11 of the past 13 years, where continuous corn was more profitable.

  • Farms paying more than $300 per acre cash rent will have a negative return, Schnitkey says. Rent and capital purchases need to drop for most operations to cash flow. Average 2013 cash rents were $223. “But cash rents will be slow to adjust downward. And if interest rates increase, expect that to pressure rents further.

  • Buying farmland at prices that cash flow is about as sound an investment as the stock market in this new environment.

  • Adding double-crop wheat to rotations, in regions where that’s climatically possible, makes economic sense, Schnitkey says. “But in northern and central Illinois, for example, I have my doubts about whether that would work.”

About the Author(s)

Susan Winsor

Before joining Corn and Soybean Digest, Susan was an agricultural magazine editor for Miller Publishing, a newspaper reporter for Gannett newspapers and Manager, Marketing Publications for Cenex/Land O’Lakes Ag Services. She graduated from Colorado State University with a Bachelor of Science degree in Agricultural Journalism.

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