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Showing posts from October, 2015

Where Can Farmers Lower Cost?

By David Bau, Extension Educator

Average 2016 corn and soybean budgets for cash rented farmland look unprofitable at projected input costs and current market prices available.  In 2007 prices were similar to what is available in 2016 for corn and soybeans. The table below compares actual figures for 2007 and 2014 from the FINBIN database for southern Minnesota and compares them to trends for 2016.

Corn and Soybean Input costs comparison between 2007, 2014 and 2016 



The figures for 2014 and 2016 indicate losses on both corn and soybeans even with crop insurance and government payments.  As you examine the fourth line from the bottom: Total direct expense per bushel you will see that in 2007 Southern Minnesota needed $2.37 per bushel of corn to cover the direct costs and $5.12 per bushel for soybeans.  Comparing these to the trend figures for 2016 of $3.91 for corn and $9.23 for soybeans, this represent a 65% increase for corn costs and 80% increase for soybean costs while prices are the…

Disappearing Profits in 2015 and 2016

By David Bau, Extension Educator

Average 2016 corn and soybean budgets for cash rented farmland look unprofitable at projected input costs and current market prices available.  National net farm income was estimated at $124 billion in 2013, $91.1 billion in 2014 and current forecast is $58.3 billion in 2015 down 36 percent from 2014.  In Southern Minnesota, corn and soybean are the main crops and the average cash prices in Worthington for 2013 were $6.04 for corn and $13.99 for soybeans. For 2014 the average cash corn price was $3.85 and $12.25 for soybeans.  In 2015 through September, the average cash corn price is $3.52 for corn and $9.32 for soybeans.

This declining trend in corn and bean prices and increasing input cost have put the farmers in a tight situation. Using an average rent of $210 per acre in the 2015 budgets, input costs would total $849 for corn and $516 for soybeans.  Even with good yields averaging 200 bushels per acre for corn at current cash price of $3.50, includ…