$4.58 breakeven corn price: ouch!


My kids would call this a buzz-kill: A $4.58 breakeven price for 2014 corn. Perhaps the one good piece of information here is that it might persuade your landlords to ease up on you.

Newly released figures from farm-management sage Gary Schnitkey, University of Illinois, amount to a 6% increase for 2013 non-land costs above 2012. That’s $615 non-land costs to produce an acre of 2013 central-Illinois corn versus $581 per acre in 2012.

Non-land corn production costs more than doubled since 2006, from $302 per acre in 2006 to $615 per acre in 2013. Non-land 2014 costs may decrease due to fertilizer price declines. However, non-land costs in the high $500 and low $600 range likely will remain for the foreseeable future, Schnitkey says.

non-land costs for corn production

“Add the $615 of non-land costs to $300 per acre cash rent, a fairly common cash rent for this level of farmland productivity, for total costs of $915 per acre,” Schnitkey says. We could reasonably expect this land to average 200 bushels of corn per acre, yielding a break-even price $4.58 per bushel ($615 / 200). Prices in the low $4 range would not cover total costs given that farmland is cash rented when yields are close to average.

Fertilizer costs are projected to decrease in 2014. All other costs likely will stay the same or increase. Given this, non-land costs in the high $500 per acre and low $600 range likely will continue for 2014 and the foreseeable future,” Schnitkey says.

The largest increases came from:

  • Pesticide costs (herbicide, insecticide, and fungicide applications) increased $17 per acre from $49 per acre in 2012 to $66 per acre in 2013, from heavier disease and pest problems.
  • Machinery depreciation increased from $55 per acre in 2012 to $63 per acre in 2013, an increase of $8 per acre due to the continued spending spree on machinery.
  • Drying costs increased from $16 per acre in 2012 to $24 per acre in 2013, an increase of $8 per acre. This resulted from a return to “normal” weather after the 2012 drought year.
  • Seed costs increased from $108 per acre in 2012 to $114 per acre in 2014, an increase of $6 per acre.  Between 2006 and 2012, seed costs averaged a yearly increase of $11 per acre.

Decreases (in Illinois figures) came from:

  • Fertilizer costs decreased $7 per acre from $200 per acre in 2012 to $193 in 2013. 
  • Hired labor, building repair and rent, and building depreciation.

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on Sep 8, 2014

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