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Serving: IN

Income Summaries Reveal A Lot About Past Three Decades

Income Summaries Reveal A Lot About Past Three Decades
Reasonable net income hard to come by in some years.

If you're 50 or older, there's probably a reason why you're not too interested in spending a big share of what you net this year, even if it's on farm equipment or facilities. That's because you remember the times not long ago when profits were hard to come by, or non-existent. Certain livestock producers only have to look back a couple years to find those times. Most of the people ready to say $7 corn and $12 soybeans are the 'new normal' are under 50 years old.

Observations of records collected in the Illinois farm recordkeeping program illustrate the point very well. Sponsored by the Illinois Farm Business Farm Management Association, with support from University of Illinois Extension and the Department of Ag economics there, several thousand farmers still take part in this 80-year old program. That makes for a sample large enough to make comparisons and conclusions. Purdue University discontinued its recordkeeping program many years ago, so similar data is harder to find in Indiana.

Illinois farmers in northern and central Illinois saw management returns per tillable acre of $130 to $164. In southern Illinois, the returns were still around 145 per acre.

However, as recently as 2009, those same numbers were $9 and $8 respectively. The highest for central and northern Illinois came in 2007. Then 2008 was a very good year for the entire state of Illinois.

However, as recently as in both 2001 and 2002, the return per tillable acre was negative in all sections of the state, reaching a $56 per acre loss in southern portions of the state.

In fact, returns for grain farmers were negative for northern and central Illinois farmers for a 10 year period from 1976 through 1985.

Livestock farmers reported huge losses on a per acre basis in 2009, ranging for, $248 for diary, to $171 for beef, to $324 for hogs. High grain prices were one of the culprits, along with mediocre commodity prices for the products those farmers marketed.

The 2010 year was much better, although dairy still only posted a $28 per acre return, with beef at $42 per acre and hogs doing a huge turn-around at 214 per acre. Most of the livestock sector fared well during the first half of 2011, with high market prices for their respective animals, but rising corn prices are eating into profits again in the second half of the year.
TAGS: Soybeans
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