average profit per acre of corn in iowa

As farmers and landowners negotiate rents for next year, Johnson said he believes 2021 could be even more challenging. Producers must have a strong grasp of their own production costs, and the ISU Extension report provides a step-by-step guide to help them estimate break-even costs, and serves to benchmark operations and trigger relevant questions on how to better manage enterprise costs. Table 2 shows actual results for northern Illinois for 2021, along with projections for 2022 and 2023. The break-even soybean price is $12.54. The projected season-average farm price is unchanged at $4.00 per bushel. Start blogging about your newest farming adventures. The increase between the five and ten-year averages is because the very high prices of the drought years (2011-2013) are added in. Contract grazing: A flat rate is paid per animal per month or per day by the livestock owner to the landowner. The publication also includes budgets for alfalfa hay establishment with an oat companion crop and by direct seeding. In northern Illinois, cash rents are projected to increase from $296 per acre up to $301 per acre. All records were kept on the accrual, or inventory, basis. 10 Most Profitable Specialty Crops to Grow Lavender. Alejandro Plastina, extension economist, 515-294-6160, [email protected], Department of Economics He estimates the average cash rent in Iowa this year at $222 per acre, which has changed little over the past four years. How to Write a Community Garden Business Plan [Sample Template], 10 Best Agricultural Crops That are Most Profitable Per Acre, How to Write a Hemp Processing Plant Business Plan [Sample Template], How to Start a Cut Flower Business in 19 Steps, How to Start a Tea Farm Sample Business Plan Template, How to Start a Peanut Farm Sample Business Plan Template, How to Start a Cucumber Farm Sample Business Plan Template, How to Start a Plantain Farm Sample Business Plan Template, How to Start a Sunflower Farm Sample Business Plan Template, How to Start an Avocado Pear Farm Sample Business Plan Template. We are projecting higher fertilizer costs in 2023. For soybeans, he estimates smaller federal payments of $32 an acre. previous year's 2.58 billion bushels. Periods of high net incomes are following by less profitable periods which often persists for several years. Special Tabulations and Restricted Microdata, 02/15/23 Still time to respond to the 2022 Census of Agriculture, USDA to follow up with producers who have not yet responded, 02/15/23 Still time to respond to the 2022 Puerto Rico Census of Agriculture, USDA to follow-up with producers who have not yet responded (Puerto Rico - English), 01/31/23 United States cattle inventory down 3%, 01/30/23 2022 Census of Agriculture due next week Feb. 6, 01/12/23 Corn and soybean production down in 2022, USDA reports In 2019, Iowa farmers produced around 2.58 billion bushels of corn for grain and harvested 13.1 million acres according to the U.S. Department of Agricultural Statistics Service. Value of farm production - value of crops produced (at market price), livestock production (net of feed and purchased livestock), inventory value gain or loss, and miscellaneous income. So any change requires processor buy-in. The average cost per acre in the livestock corn division is $206 (minimum = $186 in 1993; maximum = $235 in 1987). An increase in overhead cost per acre was made in the 2021 budgets, going from $20 to $25 per acre. However, vegetable processors choose the hybrid, provide seed of that hybrid, and set the population size. Non-land costs are projected to be $860 in 2023, up from $758 in 2022. For corn following soybeans, the following targets were used to figure the gross revenue estimate of slightly more than $600 per acre for a farmer who has 50% crop loss. Post Application Coverage Endorsement Tool (Sheet), Balance Sheet & Historical Financial Statements, Briomass Crop Budget Tool Miscanthus & Switchgrass, Illinois Soil Productivity & Yield Utilities, Farmland LEasing Facts Sheets & Pricing Information, Schnitkey, G., K. Swanson, C. Zulauf and J. Baltz. The average corn profit since 1968 has been $0.05/bu, however in the last 5 years the cost to price margin was, on average, -$0.05/bu, if this average is extended to 10 years the average corn profit per bushel is $0.49/bu. 1 0 obj To answer you have to make a lot of assumptions. The most profitable farm made $275 per acre while the least profitable lost $222 per acre from planted corn. Whole Farm > Costs & Returns > Record Summaries. The Ukraine-Russia war has further clouded the outlook and worsened supply chain issues. For example, if the custom rate for chopping, hauling and storing silage is $10.00/ton, the value of the standing silage to the buyer is reduced to $41.23 - $10.00 = $31.23 per ton, or $624.60 per acre. Additionally, what used to take days to plant can now be done in minutes. John Deere Updates 7, 8 and 9 Series Tractors For Model Year 2024, AgDay TV Markets Now: Randy Martinson Talks About How the February Crop Insurance Prices May Impact Planting Decisions. Overall, costs have increased dramatically since 2020, from $577 to $860, an increase of $283 per acre, or a 49% increase. Member. Egg prices peaked in December at around $5.43, then decreased 52% to $2.61 per dozen in February thanks to bird flu. In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. In 2019/2020, Iowa corn growers grew an average of 178 bushels per acre. The state average is 1,000 to 1,200 dozen per acre or 200 to 240 crates . At a Farmland Owners Update webinar, Johnson said he estimates that Iowa farmers, on average, will receive about $95 an acre in federal payments for the 2020 corn crop. Nationally, the average is 172 bushels per acre. %PDF-1.5 5598 0 obj <>stream County yields ranged from 37.9 bushels per acre in Decatur County to 69.1 bushels per acre in Scott County. Cost of production estimates for herbicide tolerant soybeans amount to $9.16, $8.94 and $8.74 per bushel for target yields of 50, 56, and 62 bushels per acre, respectively. Total costs are projected at $785 per acre, with $476 per acre in non-land costs and $309 per acre in cash rent. At 180 bushels per acre it is $3.58 per bushel. corn and 59 bu. Be ready for a big profit swing for 2023 to the downside. M. The governmental agency estimated corn production at 13.77 billion bushels vs. the avg. Like non-land costs, can rents have increased since 2020, increasing from $256 per acre up to $301 per acre, an increase of $45 per acre, or 18%. While commodity prices are projected lower, those prices still are not low by historical standards. Create fishing lakes or ponds for local fisherman or groups to rent. Offer indoor or outdoor storage. In this optimistic scenario, corn production would generate profits north of $95 per acre in a continuous corn rotation, and above $200 per acre following soybeans. Required fields are marked *. There has been an upward trend in the (Source: USDA, Jan. 2021) Projected returns range from $13.50 per acre for dryland corn to $194.55 per acre for irrigated corn. At $75 per ton, that's an extra $40 per acre in profit to the grower. Authors Television Broadcast average profit per acre of corn in iowa Even with those, the net return on beans is projected at a negative $15 an acre. This material may not be published, broadcast, rewritten,or redistributed. Variable cost per acre peaked in 2013 at $462 per acre ($2.83 per bushel), and is projected to be $408 per acre ($2.27 per bushel) in 2021. Opportunities to price at those levels do not exist currently. Average four-crop gross income per acre = approximately $790 per acre . Have a specific question for one of our subject experts? Net farm income, accrual - cash net income adjusted for inventory changes and accrued expenses. Corn costs were much smoother than prices. Corn stocks down, soybean stocks down from year earlier As shown in Table 2, most costs are projected to increase. And in some years, growing corn may not be the best option. In fact, there was a farm in Dubuque County that sold on June 1st for $30,600/acre! Iowa ranked first in corn production in 2020 despite both drought and damaging derecho occurring during the season. Machinery cost per crop acre - total of machinery repairs, fuel, custom machine hire, utilities, machinery depreciation and auto expense, less 75% of all custom hire income received, divided by crop acres. Projections are for a return to much lower profits in 2023, continuing a pattern of rising and falling farm incomes. During the prolonged and excessive rainfall that fell on a good portion of the U.S. in 2018, the Southeast, portions of Iowa, and the Upper Midwest had more than 60 inches of rainfall, resulting in increased abandonment rates and many unharvested acres of corn. I would think that corn seed with CRW resistance would be higher in cost. soybeans per acre, farms averaged $673 total revenue per acre and averaged $664 total cost per acre. The most profitable farm made $275 per acre while the least profitable lost $222 per acre. Contact a specialist. However, a grower generally has more control over the cost of production than price. While advancements in technology make producing corn more efficient, there are still commodity markets which must be contended with. Does not include principal borrowed or repaid, sales and purchases of capital assets, or nonfarm income and expenses. Additionally, there seems to be reactionary trend for costs to prices the year before. In recent years, corn profits have been significantly more volatile than in years past, thus affecting the income of farmers per acre. All rights reserved. All Rights Reserved. corn yields are coming in anywhere from 130 bushels per acre 776 Math Specialists. endobj Landscaping trees and shrubs. Sign-up for the CFAP program, through your local Farm Service Agency, is still underway. The key points to remember when growing popcorn is to make sure it doesn't cross pollinate with other corn you may be growing. On rented farms, only operator income and expenses were recorded. endobj The farm record data utilized in this report were obtained from the Iowa Farm Business Association. Fuel and insecticide costs, interest expenses on pre-harvest input financing, and crop insurance premiums are projected lower in 2021. Corn Following Corn 167 bushels per acre 185 bushels per acre 204 bushels per acre Your Fixed Variable Fixed Variable Fixed Variable Estimate Preharvest Machinery 1/ $28.30 $27.10 $ Seed, Chemical, etc. Units Nitrogen, $0.83 per pound 167 138.61 177 146.91 187 155.21 Phosphate, $0.75 per pound 63 47.25 69 51.75 77 57.75 ", 2023 Crop Budgets: Higher Costs and Lower Returns, Revenue and Costs for Illinois Grain Crops, Revenue and Costs for Illinois Grain Crops, Actual for 2015 through 2021, Projected 2022, Nitrogen Fertilizer Outlook for 2023 Decisions, Corn and Soybean Prevent Plant and the Dakotas, Department of Agricultural and Consumer Economics, Department of Agricultural, Environmental and Development Economics. Based on these numbers, corn is estimated to return about $155 per acre and beans will return about $70. By accessing or using the Service you agree to be bound by these Terms. For soybeans, with $621 in income, total direct costs are $485. More than 200 counties across the Corn Belt had county average rental rates above $200 per acre, with . A projected $5.30 corn price for 2023 compares to a $3.66 price from 2014 to 2019. Iowa produced almost 500 times more corn than Utah, which ranks #41 in US corn production by state. It doesn't appear that farmland prices are slowing down anytime soon either with the steady increase in prices as seen in the graph above. The United States grew 1,304,003,000 bushels (i.e. How can I make money with 10 acres? Iowa's corn for grain yield is estimated at 178 bushels per acre. Variable costs: Fuel, fertilizer, seed, irrigat. If theyre paying average cash rent, theyre not making any money, Johnson said of his outlook for soybeans. I do believe there will be some interest in lowering that fixed rent, Johnson said. Iowa State University Johnson expects federal payments to come from two main sources, the farm bill programs of ARC (Agriculture Risk Coverage) and PLC (Price Loss Coverage) and from extraordinary payments meant to cushion losses from the economic effects of the coronavirus. Iowa State University Extension and Outreach, Managing farm costs key to profitability in 2021. State Corn Yield Per Acre: Causes of Variations. The biggest is that corn and soybean prices decline, and costs do not-- an event that could happen.. In the corn divisions, depending upon year, the average maximum and minimum cost per acre is $215 to $260 in the cash grain division, and $187 to $234 in the dairy and livestock division (Table 1). The breakeven price for corn at a yield level of 200 bushels per acre is $3.23 per bushel. The 2020-2021 national average corn price, which will be finalized on Sept. 30, is now estimated at $4.40 per bushel. Email: [email protected] . The break-even soybean price is $12.54. 1.3 Billion bushels) of winter wheat in 2019. NREL . Net returns per acre to herbicide-tolerant soybean production would range from $42 to $78 per acre, depending on target yield and tillage practice. An agricultural economics and business website. The highest returns are in central Illinois with high-productivity farmland, with farmer returns of $8 for corn and $43 per acre for soybeans. An average corn fertilizer program in Southern Minnesota is expected to cost about $250 to $300 per acre in 2022, as compared to an estimated $140 per acre in 2021 and $121 per acre in 2020, based on South Central College (SCC) Farm Business Management (FBM) data. Area harvested for grain is estimated Corn for silage production is estimated at 5.33 million tons, down 33% from 2019. Woody ornamentals. equals the gross return per acre. How about ag-chem and the application costs some of which might be biannual. x=8z98[; @&bg6;bfV_de{HEv:r'@;EbIXoo.(~? The data for this report were collected by Iowa Farm Business Association consultants and compiled by Iowa State University Extension and Outreach. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 1995-document.write(new Date().getFullYear()) The estimated costs of production per bushel for corn following soybeans are $3.34, $3.31, and $3.32 for target yields of 181, 201, and 221 bushels per acre, respectively. Over time, corn yields have increased an average of 2.0 bushels per acre, while soybean yields have increased by .5 bushels per acre. The average yield on an acre of popcorn ranges from 1,000 to 4,000 pounds of grain. "Cost of production estimates, per bushel, for herbicide-tolerant soybeans are $8.89, $8.72 and $8.57 assuming 50, 56, and 62 bushels per acre, respectively. Livestock returns per $100 feed fed - value of livestock production minus livestock purchases, divided by value of feed fed, multiplied by 100. 518 Farm House Lane bushel higher per acre when comparing to the five-year average from 2016 to 2020. trade estimate of 13.68 billion and its previous estimate of 13.7 billion. You list seed costs as the same for corn after corn rotation as corn after soybeans. Also included in the formula were revenue protection (RP) insurance at the 80% level . In northern Illinois, for example, corn is projected to have a -$11 per acre return, while soybeans are projected to have an $11 return, a difference of $22 per acre. Use the 68-95-99.7 Rule (Empirical Rule) to answer the following questions. Having considered all variables, experts have come to the conclusion that farms averaged $673 total revenue per acre and averaged $664 total cost per acre. If you thinking of going into the corn farming business and are worried about what your income would look like, or you are just plain curious, we would try to provide an estimate of the profit that can be had per acre of farmed corn. For all regions of Illinois, the relatively high returns experienced in recent years are projected to end in 2023. Since 2020, total costs have increased from $833 per acre to $1,161, an increase of $328 per acre, or 39%. Knowing costs is key, as it is to understand the assumptions behind the budgets used in the calculations. For corn, land costs account for about one-third of total costs of production (Figure 2). The break-even price to cover total costs less other revenue for soybean in 2022 is projected at $11.06 per bushel. The estimated cost of production for continuous corn is $3.88 per bushel for a target yield of 166 bushels per acre, and it goes down to $3.82 for target yields of 184 and 202 bushels per acre. However, futures prices are currently reflecting a market reaction to unexpected USDA production and stocks figures, and they could retrench fast once the market reassess the real impact of the new information. #18. Working capital - current assets minus current liabilities. In the livestock corn division, the average cost per acre is $206 (minimum = $186 during 1993; maximum = $235 during 1987). Keep in mind that for the buyer, harvest costs for silage would be different than harvest costs for grain. Other than 160 acres purchased this year, he aquired this land 10+ years ago at an average land cost under $2,000/acre. Since 2013, soybeans have been more profitable than corn, albeit at much lower levels. Arable Farmer. of Science and Technology Learn . 2023 Meredith Corporation. With an expected harvest price of $3.65, the anticipated market revenue is $657 per acre. A string of great crops from 2010-2013. How Much Profit Per Acre of Corn Can a Farmer Make Yearly? Total costs equal non-land costs and land costs. Price = $5.00/bushel 2. Weighting factors are based on the number of farms in each size group in the state, as computed from the most recent Census of Agriculture. It is important to mention that although there are clear profits and losses, this does not sum up the complete profitability of a corn or soybean farmer. Iowa has led the Nation in corn production for the last 27 consecutive years and 42 of the last 43 years. Loans can be made through June 30 and this is money available, Tidgren said. Section 207(f)(2) of the E-Government Act of 2002 requires federal agencies to develop an inventory of information to be published on their Web sites, establish a schedule for publishing information, make those schedules available for public comment, and post the schedules and priorities on the Web site. And those optimum populations increased yield of marketable ears by an average of 0.53 tons per acre.

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