What is in this article?:
- Base risk management on cost of corn, soybean production
- Marketing for 2013, 2014, 2015
- How does your budget stack up?
Iowa farmer Dave Hommel determines his costs, and then works to make sales to cover inputs and generate a reasonable profit. He's not one to wait on the next higher futures price tick.
How does your budget stack up?
2014 operator and land returns are projected below levels realized in recent years, says Gary Schnitkey, University of Illinois Extension economist.
Schnitkey says, in discussing sample budgets for Illinois, budget which should also fit other Corn Belt regions.
For example, his sample budget for northern Illinois (see http://bit.ly/ILCropBudgets14), he uses a $4.60 average corn price and an $11 average soybean price. It includes all revenue and all financial non-land costs.
Corn-after-soybeans is projected to have an operator and land return of $284/acre. Schnitkey says this is the amount available to provide returns to the farmer and the land. If farmland is cash rented at $250/acre, the farmer would generate $34 of return for corn-after-soybeans ($35 = $284 operator and land return - $250 cash rent).
Schnitkey encourages growers to examine their own input costs and projections to determine their potential breakeven or profit. Marketing plans can then be tailored to provide a return when possible.