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High Breakevens Might Be Trouble

High Breakevens Might Be Trouble

SDSU Extension specialist says $4 for corn and $9 for beans is needed cover higher inputs costs.

Paul Johnson, South Dakota State University Extension crop specialist, Watertown, S.D., thinks high breakeven costs for corn and soybeans may a problem this year.

Markets are particularly volatile and not tightly tied to grain supply and demand. Oil prices and the nation's and world's economic health seem to drive prices, too.

This year, it looks as there are equal chances of corn and soybean prices rising and falling, according to Johnson.

High Breakevens Might Be Trouble

"With the present costs that I would use on corn you would have a hard time raising corn for less than $4 to break even. If I looked at soybeans with the present costs, I would look at a minimum of about $9 to break even. Most of these costs do not have labor figured in them and I am only using a land charge of $130 per acre which may be high or low depending on how you view it. With today's input prices, $2 corn and $5 beans would take a lot of farmers out of production quickly."

He suggests locking in a profit when you can.

"If we would hit a good rally it may be time to take some profit and sell," Johnson says..

SDSU Extension Communications contributed to this article.

TAGS: Extension
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