by Dave Bau, Extension educator
Harvest is in full swing and yields really vary across the region and state. With a drought in place throughout most of the summer, Minnesota farmers have been left to wonder exactly what their yields will be. On top of the drought, many farmers received strong winds which caused harvesting issues when the corn broke or laid flat. While many will receive lower yields, some farmers will receive average or above average yields.
Here are a few examples. My estimated production costs per acres for 2021 were at $750 per acre for corn and $517 for soybeans, assuming land rent at $220 per acre. I will use the last five crop year averages for Cottonwood County of 188 bushels per acre for corn and 55 bushels per acre of soybeans from the USDA. For price, I will use the average price from Meadowland Farmers Coop for the past 11 months where one of my marketing groups met. The average corn price was $4.45 and soybean $11.56. Taking these prices multiplied by average yields would generate $836.60 gross income for corn and $635.80 gross for soybeans. This would generate a net profit on corn of $86.60 per acre and $118.80 for soybeans with average yields. If a farmer was lucky enough to have better than average yields, these profits would be higher.
But what if yields are below normal? If yields are 90 percent of normal (corn yield of 169.2 bushels per acre and soybean yield of 49.5 bushels per acre), this would lower gross income to $752.94 for corn and $572.22 for soybeans or net profit for corn of $2.94 and $55.22 for soybeans. If yields are 80 percent of normal (150.4 bushels for corn and 44 bushels per acre for soybeans), gross corn income would be $669.29 or a loss of $80.72 per acre. For soybeans, gross would be $508.64 or a loss of $8.36 per acre. If yields are 75 percent of normal (141 bushels per acre for corn and 41.25 bushels per acre for soybeans), losses would increase to $122.55 per acre for corn and $40.15 for soybeans. Many farmers carry 75 percent insurance levels, which would not pay any losses if a farmer carries yield-only insurance. Revenue insurance payments are yet to be determined by fall October price levels.
Even though current cash prices at Meadowland Farmers Coop are $5.19 for corn and $12.54 for soybeans, if the farmer sold a lot of their corn and soybeans before harvest, due the good prices available, the above examples would be very realistic. The high cash corn price was $5.46 and the low price was $3.51 since October 2020 and the high cash soybean was $13.37 and the low price was $8.93. So prices received will vary for farmers, just like yields, and that will determine the farmer’s end result on the 2021 crop.
