What is in this article?:
- Returns, Cash Rents at $4.80 Corn Price, $10.75 Soybean Price
- Comparison to Recent Average Cash Rents
- Operator and Land Returns for Differing Prices
Prices in the high $4 range for corn and high $10 range for soybeans are being projected for next year. Much more will be known about price levels once clearer expectations of 2013 corn and soybean yields are reached. If prices are in the high $4 range for corn and $10 range for soybeans, returns will be lower than in recent years. As a result, cash rent levels may need to be re-evaluated, particularly for situations in which the current cash rent is above average.
Operator and Land Returns for Differing Prices
Price realizations greatly influence operator and land returns, as illustrated in Table 2. Take a 40¢ increase in corn price from $4.80 to $5.20 and an 80¢/bu. increase in soybean price from $10.75 to $11.55. This results in a $67/acre increase in operator and land return from $333/acre to $400/acre.
As price expectations change, returns will change as well. This then leads to a need to re-evaluate cash rents.
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