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Adjusting crop budgets for 2016
An ag economist says farmers will need to revise their crop budgets for 2016. University of Illinois farm management specialist Gary Schnitkey says University of Illinois ag economists have lowered projected prices for both corn and soybeans. “We’re now using $3.90 for corn and $8.85 for soybeans,” he says. “That’s down from earlier in the summer when we were a bit more optimistic on prices.”
He says those prices affect the farmer’s bottom line significantly. “On 200 bushel land a $3.90 price would result in returns that could split between the farmer and landowner at $250 an acre,” he says. “We have to have cash rents well below that if we want to have cash rents below that if we want to have positive returns for the farmer.”
Schnitkey tells Brownfield the commodity price outlook has turned more pessimistic in recent months – but long term he’s optimistic prices will increase. “But it could take a while to get there,” he says. “We’re likely back in the same situation as the late 1990’s. We had low prices there and they persisted for several years.”
He says a crop shortage could change the direction of commodity prices very quickly.
Tags: Corn, Farm Income/Prices, Illinois, Soybeans
You mention farming situation could get back to the late 1990’s. I agree, however, there is one Hugh difference in input cost. Look at the difference between the 90’s on fertilizer cost vs today. The fertilizer consolidation has certainly changed the game for the farmer. I was a buyer for a large regional farm supply with 27 retail outlets and a river terminal. This is not to mention the price of seed and chemicals. If corn doesn’t get back up and beans and wheat does not rebound soon we could see 1983/84 again.