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More of the same for 2018

More of the same, that’s the message farmers in Illinois are hearing from ag economists for their expectations into next year.

Ag economist Gary Schnitkey with the University of Illinois tells Brownfield price projections for corn and soybeans into 2018 remain low which means farmers need to continue to find ways to cut costs.   “Our farms don’t have a lot of debt when compared to their assets, the debt to assets ratio is pretty low, what we really have is a cash flow problem.  We aren’t making enough from revenue to cover all our costs.”

He says at this point most working capital is gone for farmers after several years of lower prices and with another year of the same, they need to be cautious of eroding more equity. Schnitkey says cash rents are one area to cut costs if farmers can negotiate prices lower, and fertilizer costs are substantially lower than a few years ago which will help the bottom-line.  “We continue to project soybeans to be more profitable than corn, so that’s one area we may suggest, switching more acres to soybeans.”

Schnitkey adds while interest rates are rising, they still remain relatively low overall.

Schnitkey spoke with Brownfield during the Illinois Farm Economics Summit in Dekalb.

AUDIO: Interview with Gary Schnitkey