We farm 2,400 acres of corn and soybeans and are hoping to get off to a fast start with planting, as we’ve seen higher yields with early-planted soybeans. I’m trying to figure out a good way to keep track of production costs for grain marketing purposes in case we see rallies. But it’s easy to lose track of costs while we’re moving so fast. Should I just use historic costs as a benchmark? — J.G., Wisconsin
December, January and February are the primary months to analyze last year’s financials and prepare 2019 budgets. With single-year row crops, it’s hard to have a handle on breakeven market prices or yields until the combines have rolled for about a week. In non-irrigated crops, we must make some big weather assumptions to design a preharvest grain marketing plan that will result in acceptable profit levels.
Start with three columns for the budgets: 2018 actual, 2019 land-grant university estimates and 2019 budget. We yearly compare land-grant university data among at least a half dozen universities, including Ohio State, Purdue, Illinois, Iowa State, Minnesota, Nebraska and Missouri.
Every state has a different budget format, but after massaging the data, the 2019 consensus is $450 to $500 total costs per acre for corn and $250 to $300 for beans, before land costs.
Knowing your production costs is key, but be flexible with your budget, as conditions change during the growing season. For preharvest marketing, budget for some price insurance, such as options, in case your profit-over-breakeven strategy blows up at harvest.
Jerry and Jason Moss operate Moss Family Farms Inc. email@example.com