A recent University of Illinois Farm Economics Facts and Opinions report predicts net returns for 2012 at $269/acre for corn and $136/acre for soybeans, indicating a profitable year. 

"For corn we're looking at non-land cost at $513/acre for central Illinois high-productivity land," says Agricultural Economist and Farm Management Specialist Gary Schnitkey. "That's up from last year when we had $418 projected for 2011. The $513 cost, if it happens, is the second highest on record, with 2009 higher at $535. Soybeans are projected to be $301/acre, which would be the highest ever."

Schnitkey says the costs were figured using data from 2010, which is the last year with actual numbers, then projected forward based on current input prices. The costs are based on data from farms enrolled in Illinois Farm Business Farm Management (FBFM) and the fertilizer and seed costs come from a variety of sources, Schnitkey says.

"The cost includes direct costs which are fertilizer, pesticides, seeds, drying and storage and crop insurance, power costs relating to machinery and general overhead costs," Schnitkey says. "We also added a line cost which is an average cash-rent. We used $230/acre as an average."

Schnitkey reports that the projected a breakeven prices, which would cover all costs of production, are $3.81/bu. for corn and $9.48/bu. for soybean.

"Both of those are pretty high and suggest prices above $4 for corn and $10 for soybeans for farmers to be profitable in this new cost environment," he says. "But, while we're looking at a good year, agriculture can change quickly."

Visitors to the U of I farmdoc website can view the full report.