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Extension > Agricultural Business Management News > February 2016

Wednesday, February 10, 2016

A Special Day for Women in Agriculture

By: Pauline Van Nurden, Extension Educator

There is still time to register for the first ever Women in Agriculture Conference!

This event will be hosted by University of Minnesota Extension. The day promises to provide an outstanding line up of speakers and breakout sessions. And, there will be ample opportunity for networking with other Women in Agriculture.

Tuesday, February 9, 2016

Marketing Plan Price Objectives for 2015 & 2016

By David Bau, Extension Educator

Normally farmers set their target prices in their marketing plans starting at breakeven and move higher. Farmers are determining their 2016 input costs at this time.  Lining up seed, making plans for weed and pest control, and since fall have applied or purchase fertilizer for 2016 and negotiated a rental rate.  These costs have increased at an annual rate of 9.8% per year for corn and 8.5% for soybeans for the past ten years.  Using these percentages the average 2016 corn and soybean input costs would project to $939 per acre for corn and $581 for soybeans.  Current cash prices for 2016 corn are $3.45 and soybeans $8.25.

Using yields of 180 bushels per acre for corn and 50 bushels for soybean cash would generate gross incomes of $621 for corn and $412.50 for soybeans.  This would project significant losses and the need to determine where to cut costs.  If a farmer could get input costs down to $800 per acre for corn and $500 for soybeans, this would translate to $4.44 breakeven price for corn and $10.00 for soybeans in 2016.  If a marketing plan started at these prices, the farmer would not have sold any crops yet.

In order to achieve a breakeven price at current prices available, input costs would have match the gross income of $621 for corn and $412.50 for soybeans.  A decrease from $847 average per acre input costs for corn in 2014 and $529 for soybeans.  This translates into a cut in costs by $226 per acre for corn (27% lower) and $116.50 for soybeans (22% lower).  Average corn ARC County payments are projected to average under $50 per base acre, this translates into 21cents per bushel, lowering breakeven to $4.23 per bushel.  The majority of counties will receive no government payment for soybeans in 2016.

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