And in some years, growing corn may not be the best option. According to some studies, average yield of garlic per acre is between 10,000 and 12,000 pounds and yearly profit per acre is around $80,000 what makes this crop one of the best cash crops with the highest profit per acre. Over time, corn yields have increased an average of 2.0 bushels per acre, while soybean yields have increased by .5 bushels per acre. (Source: USDA, Jan. 2021) ", 2023 Crop Budgets: Higher Costs and Lower Returns, Revenue and Costs for Illinois Grain Crops, Revenue and Costs for Illinois Grain Crops, Actual for 2015 through 2021, Projected 2022, Nitrogen Fertilizer Outlook for 2023 Decisions, Corn and Soybean Prevent Plant and the Dakotas, Department of Agricultural and Consumer Economics, Department of Agricultural, Environmental and Development Economics. An increase in overhead cost per acre was made in the 2021 budgets, going from $20 to $25 per acre. ISU used a a corn yield target of 200 bu./acre with an average price of $3.10 per bushel. The silage . County yields ranged from 37.9 bushels per acre in Decatur County to 69.1 bushels per acre in Scott County. The full report is available online through the Ag Decision Maker website. corn takes the worst figure in the study to the third best at $144 per acre profit . Still, you can apply up through June 30 at your bank or Farm Credit System lender that is participating in the program. But farmers also must maintain a production level that will result in profitable returns. of Science and Technology A bit of luck here. The wage rate used for operator labor was $2,500 per month. Website: https://ask.usda.gov/s/, June Turner, Director Email: / Phone: (202) 720-8257, Find contact information for Regional and State Field Offices. The 1964 Iowa corn yield test There is a lot of corn grown each year in the United States. Answer (1 of 4): The answer varies from farm to farm, field to field and year to year. The Estimated Costs of Crop Production use average corn seed prices paid by farmers in Fall 2020 around the state in both corn budgets, so our budgets do not disaggregate seed traits. Decision Tools on the Ag Decision Maker website, ISU cost of production estimates for 2021, https://www.youtube.com/watch?v=xuxGMkKuzeE. Arable Farmer. State Averages Total costs to produce corn for all combined areas of the state were $868 per acre. Corn and soybeans futures prices have recently rallied to their highest levels in years, providing hope for a market-driven profitable 2021 crop year. An industrial hose reel cart works great for read more. By accessing or using the Service you agree to be bound by these Terms. Price = $5.00/bushel 2. For corn, he used an estimated yield of 198 bushels and a price of $3.20 per bushel. With an average direct cost of $751 per acre of corn and $900 in sales, the farmer has about $149 left. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. The biggest is that corn and soybean prices decline, and costs do not-- an event that could happen.. For northern Illinois, the break-even corn price is $5.34 per bushel on cash rented land. Whole Farm > Costs & Returns > Record Summaries. Gross revenue (market revenue plus government payments), variable cost, and overhead cost per acre for rotation corn on average productivity soil is illustrated in Figure 2. 1. The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. Watch this video with Gary Schnitkey, University of Illinois ag economist: 3 Strategies to Manage Around High Fertilizer Prices, 5 Considerations for Rising Prices and Cost of Production in 2022, Three precision ag features lead the updates being made to John Deeres 7, 8 and 9 Series Tractors for the new model year. Given higher costs, break-even levels will be much higher. Knowing costs is key, as it is to understand the assumptions behind the budgets used in the calculations. If your fuel cost last year was $2.50/gallon and this year it is $5.00/gallon it will only cost you a little over $3 more per acre and if you get 2 tons/acre first cutting, .How Much Does it Cost to Ship Cattle? How Much Profit Per Acre of Corn Can a Farmer Make Yearly? The total cost per bushel of soybeans is projected at $9.04 for non-herbicide-tolerant beans at 56 bushels per acre, according to the report. More details on 2023 budgets are available in the management section of farmdoc through two documents: Schnitkey, G. and K. Swanson. Profits from soybean production would exceed $110 per acre. Contact a specialist. Hunting income is available to farmers. Client Corner: Where can I find average prices for corn and soybeans? If water requirements are met with a good irrigation system and other cultural practices optimized, sweet corn yields can be up to 7 to 8 tons per acre or 2,000 dozen. The Guide also reports expected variable costs of $403 per acre. Fuel and insecticide costs, interest expenses on pre-harvest input financing, and crop insurance premiums are projected lower in 2021. For soybeans, he estimates smaller federal payments of $32 an acre. Iowa State University For example, if the custom rate for chopping, hauling and storing silage is $10.00/ton, the value of the standing silage to the buyer is reduced to $41.23 - $10.00 = $31.23 per ton, or $624.60 per acre. Copyright 2023 Profitable Venture Magazine Ltd | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. At 160 bushels per acre, it is $4.03. For corn, Johnson estimates a PLC payment of $65 an acre. 1.494 billion bushels of Iowa corn in the 2018/19 marketing year went into corn processing used in the wet mill industry for food and industrials usage. When breaking down the costs of production, the ISU update stated that, "For corn, land represents . NREL . Depreciation is estimated at 10% of current value of the machinery. 5552 0 obj <> endobj The Illinois Central CRD has a 210.4 bushel per acre average corn yield, a 64.0 bushel per acre soybean yield, and a 3.29 corn-to-soybean yield ratio (3.29 = 210.4 corn yield / 64.0 soybean yield). In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. However, the only certainty about future prices is that they will continue to change until their expiration date, and they could plummet as fast as they rallied. endobj it gets. Last Tuesday, the Food and Agricultural Policy Research Institute released an estimate of a record $32.8 billion in direct payments that will go to farmers this year. © 1995 - 2023 Farm Journal, Inc. All RightsReserved. Eligibility is determined in part by last years payroll and self-employment income. Profitability risks will be mitigated over time as input prices are locked in and as projected prices for crop insurance are set in February 2023. In an average year, Iowa produces more corn than most countries. The average flat rate in 2020 for harvesting wheat was $24.96 per acre, a decrease of $0.26 from $25.22 per acre in 2018. An analysis of state average corn yield history data provided by the USDA NASS indicates there are two causes of corn yield (in bushel per acre) variations at the regional level in the United States. These returns are for a typical 50% corn and 50% soybean rotation in central Illinois. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021-22, respectively. During the prolonged and excessive rainfall that fell on a good portion of the U.S. in 2018, the Southeast, portions of Iowa, and the Upper Midwest had more than 60 inches of rainfall, resulting in increased abandonment rates and many unharvested acres of corn. While fertilizer prices have declined recently (see farmdoc daily, July 19, 2022), fertilizer prices are still much higher than last year. This is $20 per acre lower than 2019. Required fields are marked *. Machinery costs are projected to decline by 6% primarily due to lower diesel costs: $2.02 in 2021 versus $2.53 in 2020. Interest is not included. The technology trend causes an upward slope of yield over time. Create fishing lakes or ponds for local fisherman or groups to rent. But despite this volatility, corn farmers are still making some good profit from their corn farms, depending on the yield of that year. While projected returns may not justify an increase in cash rent, relatively high profitability in recent years and continuing high commodity prices likely lead to cash rent increases. The most recent release, September 2019, showed county-level rental rates for non-irrigated cropland ranging from less than $10 per acre in several Western states to more than $250 per acre across portions of the Corn Belt in Illinois and Iowa. Non-land costs are based on historical expenses on Illinois farms, updated based on current and expected input price levels. Price. Table 1 provides corn and soybean budgets for four regions of Illinois: More detailed budgets are available here in the management section of farmdoc. In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. For corn following soybeans, the following targets were used to figure the gross revenue estimate of slightly more than $600 per acre for a farmer who has 50% crop loss. At a Farmland Owners Update webinar, Johnson said he estimates that Iowa farmers, on average, will receive about $95 an acre in federal payments for the 2020 corn crop. This can be viewed in Figure 2. All these serve to influence what a farmer can make from an acre of corn. Second, farmers paying land rents higher than the ones projected in the report might face higher costs of production. Gross income = $950 / acre 4. The average price per acre for farmland in Iowa is currently $13,859.79/acre. Those break-even prices are above average prices received from 2014 to 2019 ($3.66 per bushel for corn and $9.69 for soybeans). Values of $187, $222, and $256 per acre rent charges for the low, medium, and high quality land were assumed. On rented farms, only operator income and expenses were recorded. Nitrogen price is projected stable at $.34 per pound in 2021, but total nitrogen costs are projected to go up by 6 to 11% reflecting the higher application rates recommended by the ISU Corn Nitrogen Rate Calculator. do champions league winners get automatic qualification. Since 2013, soybeans have been more profitable than corn, albeit at much lower levels. Davis Michaelsen and Editor Brian Grete discuss this week's market action From conventional horizontal tillage to strip-till and no-till, the key is applying a production system that can overcome each fields weakness. Offer indoor or outdoor storage. The deadline is August 28. {\U{f~uoos;h?zYQ HUoTn>'?{GYHY S|DB?QBZ?Bj+W?=}(]'+?L p?8Pv' B5UFWVTM}UJ9{QGQ4tOygp9 z,OloloKOlfo+V} \f>8t&^U `H198R00t(0TM Up!X ['SMezWgop%B R 1&[UMSi4!k Zm]4#7{qmS7v;lW->b.%I zv9 In recent years, corn profits have been significantly more volatile than in years past, thus affecting the income of farmers per acre. Corn production would not be profitable in a continuous corn scenario if the price per bushel is $3.65. Yields are set at trend levels for 2023, with trends established through historical yields. Those break-even price are above average prices received from 2014 to 2019: $3.66 per bushel for corn and $9.69 for soybeans. All Rights Reserved. This helped in seeking the demand of people more than the previous 40 years. The graph below shows the US national average winter wheat yield in bushels per acre as reported by the USDA NASS . That program is the CFAP (Coronavirus Food Assistance Program) for 2020, but the payment being made now reflects the 2019 production and unpriced bushels as of January 15. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. Projected returns range from $13.50 per acre for dryland corn to $194.55 per acre for irrigated corn. <> Seed and fertilizers amount to 44% of variable costs. A lot more money is coming from the government than probably any time in the last 20 years, says Steve Johnson, a farm and ag business management specialist with ISU. Variable cost per acre peaked in 2013 at $462 per acre ($2.83 per bushel), and is projected to be $408 per acre ($2.27 per bushel) in 2021. Data for ending assets and liabilities represent those of the operator only, and do not include the value of rented land. It is important to mention that although there are clear profits and losses, this does not sum up the complete profitability of a corn or soybean farmer. The average yield on an acre of popcorn ranges from 1,000 to 4,000 pounds of grain. Required fields are marked *. The farm record data utilized in this report were obtained from the Iowa Farm Business Association. While advancements in technology make producing corn more efficient, there are still commodity markets that must be contended with to make the industry more profitable. Non-land costs for 2019 are projected at $369 per acre, an increase of $15 per acre over 2018 costs. endstream endobj startxref No other revenues are projected, giving a gross revenue projection of $567 per acre. For farmers, that self-employment income is reported on their income tax Schedule F. Because many farmers didnt report income last year, PPP, administered by the Small Business Administration, hasnt been as useful as CFAP, Tidgren said. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. Woody ornamentals. Sell plant seeds online. Lower commodity prices are possible from any number of causes. The 2022 projected costs exceed 2021 cost of $652 per acre by $124 per acre. Obviously, risks of lower returns exist. for the fresh market and 4 to 6 tons per acre for processing. equals the gross return per acre. When using the ISU cost of production estimates for 2021, keep several things in mind. 1.3 Billion bushels) of winter wheat in 2019. 10 Most Profitable Specialty Crops to Grow Lavender. Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. According to Iowa State it takes about 1.25 gallons of diesel fuel to cut, rake and bale per acre. Projections are for a return to much lower profits in 2023, continuing a pattern of rising and falling farm incomes. History suggests that low prices would not lead quickly to lower costs, as costs typically exhibit lags in adjustments. Only farms with sales of $100,000 or more were counted in making the weighting. %PDF-1.6 % It doesn't appear that farmland prices are slowing down anytime soon either with the steady increase in prices as seen in the graph above. stream For soybeans, the yield is pegged at 55 bushels an acre with an average selling price of $8.20 per bushel. Corn seed costs are expected to increase by 2% to $262 per bag. The estimated costs of production per bushel for corn following soybeans are $3.34, $3.31, and $3.32 for target yields of 181, 201, and 221 bushels per acre, respectively. Schnitkey, G., K. Swanson, N. Paulson, C. Zulauf, J. Coppess and J. Baltz. There has been an upward trend in the The most profitable farm made $275 per acre while the least profitable lost $222 per acre. In fact, there was a farm in Dubuque County that sold on June 1st for $30,600/acre! Soybeans could trigger a $10-per-acre PLC or ARC-CO payment and CFAP would bring another $12 an acre. Annual production costs for established alfalfa or alfalfa-grass hay as well as a budget for maintaining grass pastures are included. The USDA pegged the U.S. corn yield at 168.4 bushels per acre vs. the average trade estimate of 167.5 bu./acre and its previous estimate of 168.2. With an expected harvest price of $3.65, the anticipated market revenue is $657 per acre. The break-even soybean price is $12.54. corn and 59 bu. This material may not be published, broadcast, rewritten,or redistributed. Such methodological adjustment resulted in an average 6% increase in the amount of nitrogen applied to corn following corn, and an 11% increase in the amount applied to corn following soybeans. It is difficult to predict corn-production economics. The break-even soybean price is $12.54. 0 bushel higher per acre when comparing to the five-year average from 2016 to 2020. Domestic use, exports, and ending stocks are also unchanged for 2020 /21. Until that point, the risks of low returns from price declines will be large. A projected $5.30 corn price for 2023 compares to a $3.66 price from 2014 to 2019. This is a record yield and up substantially from 2020's average yield of 177 bushels per acre. Total costs equal non-land costs and land costs. Be ready for a big profit swing for 2023 to the downside. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 1995-document.write(new Date().getFullYear()) At projected cost levels, per bushel prices of $5.30 for corn and $12.75 for soybeans result in marginal profitability, similar to levels experienced from 2014 to 2019. At the landowner webinar, Kristine Tidgren, director of ISUs Center for Agricultural Law and Taxation, covered the highlights of the nearly $700 billion program. A central Illinois corn farmer will make a $24 per acre profit in 2022 after paying for inputs and land costs, according to the latest crop budgets from the University of Illinois. 3: How much better is this field than the county average? The state average is 1,000 to 1,200 dozen per acre or 200 to 240 crates . CFAP isnt the only corona virus-related program that farmers might be able to use. Interest rates, energy prices, and wage rates continue to increase, and supply issues that began in Covid have not been resolved. #18. While advancements in technology make producing corn more efficient, there are still commodity markets which must be contended with. Written byAlejandro Plastina,Extension Economist,plastina@iastate.edu. Nearly 30,000 kernels of corn are planted per planted acre, and corn yields can be close to 200 bushels per acre in a good year on high CSR land. Starting in 2021, the amount of nitrogen applied to corn production follows the recommendations from the ISU Corn Nitrogen Rate Calculator. Net farm income, cash - total sales and other cash income minus cash expenses, including purchases of livestock and feed. The largest proportion of costs involved in corn farming is land, fertilizer, and fixed and variable equipment. The soybean price of $8.20 is only 20 under the soybean reference price of $8.40. average profit per acre of corn in iowa. "pdf" file that you can access by clicking here. However, vegetable processors choose the hybrid, provide seed of that hybrid, and set the population size. And Mexico is huge! I do believe there will be some interest in lowering that fixed rent, Johnson said. Projected prices are $5.30 per bushel for corn and $12.70 for soybeans, near current 2023 fall bids. There likely will be a large PLC payment, Johnson said. Since 2020, total costs have increased from $833 per acre to $1,161, an increase of $328 per acre, or 39%. Total costs are projected at $785 per acre, with $476 per acre in non-land costs and $309 per acre in cash rent. While 2023 is projected to be profitable, risks exist. The lowest returns are projected for southern Illinois, with farmer returns of -$63 per acre for corn and -$61 per acre for soybean. Ames, IA 50011-1054. If you thinking of going into the corn farming business and are worried about what your income would look like, or you are just plain curious, we would try to provide an estimate of the profit that can be had per acre of farmed corn. Working capital - current assets minus current liabilities. Friday, an Iowa State University (ISU) farm management specialist told landowners that all of any profits farmers earn this year on corn will be due to those payments and that even with federal help, soybeans will lose an average of $15 an acre. Total costs of corn and soybean production per acre are expected to increase, respectively, by 2.1% 3.4% and 2.6% in 2021. Willows .