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FEFO Archive: Crop economics

Projected 2015 Corn Revenue with Comparisons to Revenues from 2010 to 2014
Gary Schnitkey
FEFO 15-08, 4/21/2015
 

Abstract

In Illinois, 2015 gross revenues for corn are projected to be lower than 2014 gross revenues. In 2015 for corn, gross revenues are projected in the mid to high $800 per acre range for farms in Northern and Central Illinois with high-productivity farmland. Gross revenues in the low $800 per acre range are projected for farms with lower-productivity farmland in Central Illinois. Gross revenues in the low $700 range are projected for Southern Illinois farms.
 
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Expected Corn and Soybean Returns and Shifts in Acres
Gary Schnitkey
FEFO 15-06, 3/30/2015
 

Abstract

Expected corn minus soybean returns in 2015 were calculated for U.S. counties. These expected returns suggest that shifts to soybeans are more likely outside the Corn Belt. Moreover, expected 2015 returns suggest smaller acreage shifts than in other recent years.
 
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Possible Per Acre Gross Revenues for Corn in 2015 in Central Illinoi
Gary Schnitkey
FEFO 15-05, 3/17/2015
 

Abstract

Possible gross revenues for corn grown in 2015 are estimated for a Logan County, Illinois farm. The mid-point of 2015 gross revenue range is $828 per acre, $52 below the estimate of total costs for cash rent farmland of $880 per acre. Gross revenue is estimated to exceed $880 per acre 23% of the time.
 
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Soybeans Returns Projected Higher than Corn in 2014
Gary Schnitkey
FEFO 14-19, 10/28/2014
 

Abstract

Projections indicate that soybeans will be more profitable than corn in 2014. Having a higher return for soybeans is unusual and may have implications for 2015 planting decisions.
 
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Projected Corn Gross Revenues Down in 2014 and 2015
Gary Schnitkey
FEFO 14-18, 10/21/2014
 

Abstract

Per acre gross revenue for corn in 2014 is projected to be $808 per acre in northern Illinois, $292 lower than the 2011 through 2013 average of $1,100 per acre. Given the current price outlook, average gross revenue in 2015 is projected lower than 2014 revenue. These lower revenues will require cash flow adjustments on farms.
 
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Will Non-Land Costs Decrease in 2015?
Gary Schnitkey
FEFO 14-17, 9/16/2014
 

Abstract

Modest decreases in costs are projected for 2014. It is, however, difficult to identify where further large decreases in costs will occur in 2015. Fertilizer and seed costs need to decrease if non-land costs are to continue to lower levels.
 
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Non-Land Costs for Corn Increased in 2013
Gary Schnitkey
FEFO 14-11, 6/3/2014
 

Abstract

Summaries of farms enrolled in Illinois Farm Business Farm Management (FBFM) indicate that 2013 non-land costs for producing corn were $615 per acre in central Illinois for high-productivity farmland. The $615 per acre cost in 2013 was $34 per acre higher than in 2012.
 
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Evaluating the Historical Variability of Corn's Market Year Average Price and Projecting Price Loss Coverage Payments
Gary Schnitkey and Darrel Good
FEFO 14-10, 5/13/2014
 

Abstract

Historical price variability is used to estimate price distributions for future MYA corn prices. Given historical variability and a $4.50 mean, PLC payments are estimated to occur in 9% of the years and have a rate of $.033 per base bushel.
 
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Monthly Fertilizer Prices: Spring 2014 with Comparisons to 2009 through 2013
Gary Schnitkey
FEFO 14-08, 4/15/2014
 

Abstract

Fertilizer prices have been increasing in recent months; however, per acre fertilizer costs should be lower in 2014 than in recent years. Prices suggest fertilizer costs for corn of $150 per acre in 2014, compared to costs near $200 per acre in 2012 and 2013.
 
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Causes of High U.S. Corn Yields: Evaluation of County Yields
Gary Schnitkey
FEFO 14-07, 3/25/2014
 

Abstract

An evaluation of county yields for years between 2004 through 2013 suggests that corn yields have to be above average across the vast majority of the corn-belt counties for the U.S. to have a corn yield significantly above trend. Similarly, county yields in the majority of corn-belt counties have to be below average for the U.S. yield to be significantly below trend.
 
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Controlling Costs with Lower Crop Revenues: Cash Rents
Gary Schnitkey
FEFO 14-05, 2/25/2014
 

Abstract

Corn and soybean prices in 2014 are projected to be much lower than prices between 2010 and 2012. As a result, current projections place operator and farmland returns below average cash rents, leading to the need to reduce cash rents.
 
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Controlling Costs with Lower Crop Revenues: Fertilizer Costs
Gary Schnitkey
FEFO 14-03, 1/28/2014
 

Abstract

From 2006 to 2013, fertilizer costs rose substantially, increasing by 144% for corn and 161% for soybeans. Since September of 2013, fertilizer prices have declined, likely leading to lower fertilizer costs for into the 2014 production year.
 
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Break-Even Corn Prices: History and Projections
Gary Schnitkey
FEFO 13-21, 11/5/2013
 

Abstract

Break-even corn prices have increased from $1.67 per bushel in 2004 to the mid-$4.00 range in 2013 and 2014. Mid-$4.00 break-even prices will cause losses when corn prices are in the in the low-$4 range or below.
 
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Projected 2013 and 2014 Operator and Farmland Returns
Gary Schnitkey
FEFO 13-19, 10/1/2013
 

Abstract

Operator and farmland returns are projected to be lower in 2013 and 2014 as compared to returns from 2010, 2011, and 2012. Lower returns occur primarily because of lower commodity prices, but also because of higher non-land costs.
 
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Corn-to-Soybean Yield Ratios: History and the Future
Gary Schnitkey
FEFO 13-18, 9/24/2013
 

Abstract

Relative corn and soybean yields impact relative corn and soybean profitability. The 2013 corn-to-soybean ratio for Illinois was above those between 2010 and 2012, but below the average for the decade of the 2000s.
 
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Wheat Returns on Southern Illinois Farms
Gary Schnitkey
FEFO 13-16, 8/27/2013
 

Abstract

Returns are compared on southern Illinois farms that grew and did not grow wheat from 2006 to 2012. Overall, comparisons suggest that farms growing wheat had comparable profitability to those farms that did not grow wheat
 
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2014 Crop Budgets
Gary Schnitkey
FEFO 13-12, 7/30/2013
 

Abstract

Returns in 2014 Illinois Crop Budgets imply that corn-soybean rotations will be the most profitable and that operator returns will be lower than many cash rents, suggesting the need to re-evaluate cash rents.
 
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Late Planting and Tools in FAST
Ryan Batts and Gary Schnitkey
FEFO 13-08, 5/1/2013
 

Abstract

The Planting Decision Model includes a “Returns by Planting Date” module which calculates projected returns from corn and soybeans by planting date in northern, central, and southern Illinois. According to projections in this tool, corn will be the more profitable to plant in all areas until late May. In central Illinois, corn is projected more profitable than soybeans into June.
 
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Recent Price Changes Alter Relative Corn and Soybean Returns
Gary Schnitkey
FEFO 13-05, 4/4/2013
 

Abstract

During the first quarter of 2013, price changes have increased expected soybean returns relative to expected corn returns. On lower productivity farmland, soybeans are now projected more profitable than corn.
 
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2013 Illinois County Yields and GRIP Payments
Gary Schnitkey
FEFO 13-04, 2/26/2013
 

Abstract

NASS county yields confirm that the drought significantly lowered 2012 production, with extremely low yields being prevalent in southern Illinois. Most counties will have GRIP-HR payments for corn, with many counties having large payments. Fewer counties had GRIP-HR payments for soybeans.
 
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Low Crop Revenue Most Likely Due to Lower Prices
Gary Schnitkey
FEFO 13-02, 2/5/2013
 

Abstract

Based on historical yield and price changes, low revenues are most likely from declining prices and near normal yields.
 
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More Corn in 2013?
Gary Schnitkey
FEFO 13-01, 1/23/2013
 

Abstract

Corn is projected to be more profitable than soybeans in 2013. While planting corn is projected more profitable in 2013, a longer run perspective indicates that planting more corn in 2013 may reduce profits in future years.
 
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Projected 2013 Corn and Soybean Budgets
Gary Schnitkey
FEFO 12-19, 8/21/2012
 

Abstract

Projected 2013 budgets suggest non-land costs will be the same for corn and soybeans in 2013 as in 2012. Projected 2013 returns for corn are projected to be between 2011 and 2012 returns. Projected 2013 soybean returns are lower than 2011 and 2012 returns.
 
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Little Change in Where Corn Is Planted in the United States
Gary Schnitkey
FEFO 12-09, 4/3/2012
 

Abstract

While planted acres have grown over time, the areas where corn is grown in the United States has not changed much.  Success of corn intense rotation will impact whether large corn plantings occur in the future.
 
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Corn-Soybean Planting Decisions and Longer Run Returns
Gary Schnitkey
FEFO 12-03, 1/31/2012
 

Abstract

Long-run impacts of corn-soybean cropping decisions are evaluated in this article. More intense corn rotations reduce corn-after-soybeans acres, often some of the most profitable acres on a farm.
 
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Reductions in Projected 2012 Crop Returns due to Projected Prices Reductions
Gary Schnitkey
FEFO 11-22, 11/29/2011
 

Abstract

During the fall of 2011, future prices suggest that 2012 projected cash prices declined by $1.00 per bushel for corn and $2.00 per bushel for soybeans. These price declines lowered crop returns by around $145 per acre and reduce the difference in corn and soybean production.
 
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Break-Even Corn-After-Corn Yields and Yield Drags
Gary Schnitkey
FEFO 11-20, 11/1/2011
 

Abstract

Many Illinois farmers have been disappointed with 2011 corn-after-corn yields, reporting significantly lower corn-after-corn yields compared to corn-after-soybean yields. Break-even corn-after-corn yields for 2012 are between 24 and 35 bushels lower than corn-after-soybean yields.
 
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Commodity Prices Resulting in $50,000 Net Farm Income
Gary Schnitkey
FEFO 11-19, 10/25/2011
 

Abstract

A $3.70 per bushel for corn and $8.51 per bushel for soybeans results in $50,000 of net income on a grain farm that purchases crop insurance and owns 15 percent, share-rents 45 percent, and cash rents 40 percent of its farmland.
 
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Relationship Between Anhydrous Ammonia and Natural Gas Prices
Gary Schnitkey
FEFO 11-18, 10/18/2011
 

Abstract

The ratio of anhydrous ammonia to natural gas prices has become more variable and higher since 2006. Changes in anhydrous ammonia prices are not being driven by changes in natural gas prices.
 
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Wheat/Double-Crop Soybeans Competitive in Southern Illinois for 2012
Gary Schnitkey
FEFO 11-14, 8/2/2011
 

Abstract

Recently compiled 2012 southern Illinois crop budgets have projected operator and farmland returns for wheat/double crop soybean at $359 per acre. This $359 per acre return compares to $418 per acre from corn-after-soybeans and $315 per acre for soybeans.
 
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2012 Corn and Soybean Budgets
Gary Schnitkey
FEFO 11-13, 7/20/2011
 

Abstract

Costs in 2012 are projected to increase, leading to high break-even commodity prices. Projected 2012 commodity prices suggest that 2012 will be a profitable year. Of course, economic situation could change between now and 2012 harvest.
 
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Risk Reductions Possible by Hedging 2012 Grain Production in the Summer of 2011
Gary Schnitkey
FEFO 11-12, 7/6/2011
 

Abstract

It has been suggested that farmers consider locking in profits for the 2012 production year. Current commodity price and cost levels suggest it may be possible to lock in profits.
 
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Cost to Produce Corn and Soybeans in Illinois-2010
Bradley L. Zwilling
FEFO 11-11, 6/21/2011
 

Abstract

In 2010, the total of all economic costs per acre for growing corn in Illinois averaged $739 in the northern section, $717 in the central section for farmland with “high” soil ratings, $687 in the central section for farmland with “low” soil ratings, and $635 in the southern section. Soybean costs per acre were $524, $539, $493 and $467, respectively.
 
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Economics of Prevented Planting in Corn
Gary Schnitkey
FEFO 11-10, 5/25/2011
 

Abstract

In this article, net returns from taking a prevented planting are compared to expected net returns from planting corn and soybeans. Examples suggest prevented planting have returns competitive with planting corn or soybeans.
 
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Will Hedging 2011 Corn Now Reduce Downside Revenue Risk?
Gary Schnitkey and Bruce Sherrick
FEFO 11-09, 5/18/2011
 

Abstract

Relative to no hedging, hedging will reduce risks of low revenue. Only modest amounts of hedging are needed to reduce risks when 75 percent and higher crop insurance policies are purchased.
 
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Production of Bioenergy Crops in the Midwest
Madhu Khanna, Atul Jain & Anthony Oliver
FEFO 11-06, 4/1/2011
 

Abstract

We examine the yields and breakeven prices for producing miscanthus and switchgrass. High yielding crops, such as miscanthus, are likely to be economically attractive in some locations in the Midwest and on marginal lands.
 
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Corn Profitability Higher than Soybean Profitability in the Corn-belt: Will Corn Acres Increase?
Gary Schnitkey
FEFO 11-05, 3/25/2011
 

Abstract

Corn is projected to be more profitable than soybeans by historic margins over much of the corn-belt.
 
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Non-Land Costs Higher in 2011
Gary Schnitkey
FEFO 11-01, 1/18/2011
 

Abstract

Non-land costs to produce corn in central Illinois will rise in 2011, approaching $500 per acre. These costs will be higher than in 2010, but likely below 2009 levels. Non-land production costs likely will continue to increase into the 2012 production year
 
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2011 Return Projections Suggest Corn Will be More Profitable than Soybeans
Gary Schnitkey
FEFO 10-18, 11/2/2010
 

Abstract

Currently, budgeting for the 2011 crop year indicates that corn will be much more profitable than soybeans.
 
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2011 Crop Budgets: Implications for Crop Rotations and Returns
Gary Schnitkey
FEFO 10-14, 8/16/2010
 

Abstract

First estimates of 2011 returns for Illinois crops are provided in this report. Current projections suggest that 2011 returns will be below 2007 and 2008 levels, but above those for 2009.
 
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Power Costs Increased on Grain Farms
Gary Schnitkey
FEFO 10-12, 7/26/2010
 

Abstract

Power costs on Illinois grain farms have increased over the last five years. In 2005, power costs averaged $68 per acre for grain farms located in northern and central Illinois who were enrolled in Illinois Farm Business Farm Management (FBFM).
 
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Working Field Days in Illinois
Gary Schnitkey
FEFO 10-11, 6/4/2010
 

Abstract

Evaluation of working day data from 1980 through 2009 indicates that there is about a 50% chance that any day in April or May will be suitable for field work. Significantly fewer days were available during 2009 than indicated by these preceding probabilities.
 
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Revised Corn and Soybean Budgets for 2009 and 2010
Gary Schnitkey
FEFO 10-10, 5/24/2010
 

Abstract

Non-land costs in 2010 are projected to be below the record high non-land costs of 2009. Projected 2010 returns are below 2007 and 2009 levels and are near 2000 through 2003 levels.
 
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Lower Crop Returns and Higher Costs Lead to Lower Farm Earnings in 2009
Bradley L. Zwilling
FEFO 10-08, 4/23/2010
 

Abstract

Based on Illinois Farm Business Farm Management Association (FBFM) records that have been recently summarized, average farm operator returns for labor and management on 2,624 Illinois farms was lower for all geographic areas in the state in 2009 compared to 2008 and below the average for the last five years.
 
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Changes in Crop Acres Since Freedom to Farm
Gary Schnitkey
FEFO 10-05, 3/29/2010
 

Abstract

From 1990-1994 to 2005-2009, soybeans and corn grew in acres. Crops losing acres were wheat, barley, grain sorghum, corn silage, cotton, peanuts, dry edible beans, and potatoes. Corn and soybean acre increases were predominately located in the great plains and greater Corn Belt.
 
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Fertilizer Prices in 2008, 2009, and 2010
Gary Schnitkey
FEFO 10-02, 2/4/2010
 

Abstract

Fertilizer costs for corn in 2010 likely will average $100 per acre for corn on high-productivity farmland in Illinois. These costs will be below 2009 costs. These fertilizer costs are based on fertilizer prices reported in a new report listing average fertilizer prices in Illinois.
 
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Yield Increases on Illinois Crops: Questions for the Future
Gary Schnitkey
FEFO 10-01, 1/27/2010
 

Abstract

Over time, yields on crops grown in Illinois have increased due to technological advances. In this article, growth rates are examined for the four crops with the largest number of acres in Illinois: corn, soybeans, wheat, and alfalfa.
 
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Drying Costs and Shrink Losses Are Large in 2009
Gary Schnitkey
FEFO 09-16, 10/21/2009
 

Abstract

Moisture levels on corn are much higher this year than in recent year, with some farmers harvesting corn with moisture levels in the high 20% range. These high moisture levels will result in shrink and drying costs for grain delivered to elevators and processors that could be near $100 per acre.
 
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Corn and Soybean Returns in 2009 and 2010
Gary Schnitkey and Nick Paulson
FEFO 09-13, 9/9/2009
 

Abstract

Projected 2009 corn and soybean returns are at the lowest levels during the 1990s and 2000s. Projected 2010 returns are near 2004 through 2005 levels
 
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Evaluating Economic Alternatives for Late Planting
Gary Schnitkey
FEFO 09-10, 6/3/2009
 

Abstract

Adverse planting decisions have again resulted in late planting across Illinois. A spreadsheet is shown that can evaluate the alternatives of planting corn, planting soybeans, or taking prevented planting payments
 
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Average Cash Rents Per County in 2008
Gary Schnitkey
FEFO 09-08, 5/12/2009
 

Abstract

The National Agricultural Statistical Service (NASS), an agency of the U.S. Department of Agriculture, released average cash rents for 2008 by county. NASS has conducted a survey and reports cash rents for counties in which they sufficient responses exist to estimate averages.
 
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Updated 2009 Budgets: Return Projections, 2010 Cash Rents, and Planting Decisions
Gary Schnitkey
FEFO 09-06, 3/27/2009
 

Abstract

Given current projections, returns for 2009 are likely to be below any returns experienced since 2000. Lower returns could place downward pressure on 2010 cash rents. Recent cost and price changes have increased the expected profitability of corn relative to soybeans.
 
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2009 Crop Insurance Changes Suggest Considering Either Grip or Enterprise Units and BE for CRC and RA-HP
Gary Schnitkey
FEFO 09-03, 2/13/2009
 

Abstract

Changes to crop insurance will lower premiums for enterprise units on CRC and RA products. The Biotech Endorsement has been expanded to include more hybrids.
 
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Fertilizer Prices Likely to Decline in 2009
Gary Schnitkey
FEFO 09-02, 1/14/2009
 

Abstract

Difficulties within the financial sector became apparent in the middle of September as the United States government grappled with responses to a worsening credit situation. This document describes the ACRE program, a choice farmers have for receiving Federal farm commodity payments.
 
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Corn Profits Versus SoyBean Profits in 2009
Gary Schnitkey
FEFO 08-20, 12/9/2008
 

Abstract

Corn and soybean prices have declined as the U.S. financial crisis became apparent in the middle of September. Besides reducing profits, price changes have caused expected relative profits of 2009 corn and soybean production to change.
 
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Drying and Storage Costs in 2008: Comparing Alternatives with the Grain Delivery Model
Gary Schnitkey
FEFO 08-15, 9/27/2008
 

Abstract

Commercial drying and storage charges for grain will be higher in 2008 than in recent years. A FAST Microsoft Excel spreadsheet called the Grain Delivery Model has been developed that compares net revenues across delivery points.
 
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Dramatic Increases in Corn and Soybean Costs in 2009
Gary Schnitkey
FEFO 08-13, 7/11/2008
 

Abstract

Non-land production costs for corn are projected at $529 per acre in 2009, an increase of $141 per acre over 2008 costs. Soybean costs are projected at $321 per acre in 2009, an increase of $82 per acre over 2008 costs.
 
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Impacts of Rising Crude Oil Prices on Corn and Soybean Production Costs
Gary Schnitkey and Anuj Gupta
FEFO 08-10, 5/20/2008
 

Abstract

Data are used to quantify how crude oil prices and general inflation rates impact corn and soybean production costs. Each $1 increase in crude oil price increases corn production costs by $1.51 per acre and increases soybean production costs by $.90 per acre.
 
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2007 Corn Yields in Perspective
Gary Schnitkey
FEFO 08-09, 5/9/2008
 

Abstract

Overall, 2007 was a good yielding year for corn in northern and central Illinois. Farms with corn yields averaging over 200 bushels per acre were common in 2007. While 2007 was a good production year on average, there were areas of the Corn Belt that experienced below trend yields.
 
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Historic and Projected Corn versus Soybean Returns: Release of FBFM Corn and Soybean Results
Gary Schnitkey and Dale Lattz
FEFO 08-07, 4/4/2008
 

Abstract

Projections for 2008 suggest that corn will be much more profitable than soybeans in 2008. In 2006 and 2007, corn has been more profitable than soybeans by about $90 per acre.
 
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Corn versus Soybean Returns in 2008
Gary Schnitkey and Darrel Good
FEFO 08-06, 3/24/2008
 

Abstract

Given current cash bids for fall delivery, our analysis suggests that corn will be more profitable than soybeans in 2008 on many farms in Illinois. This analysis is conducted by calculating expected corn and soybean revenues for each Crop Reporting District in Illinois.
 
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Cost to Produce Corn and Soybeans in Illinois - 2007
Dale Lattz
FEFO 08-05, 3/20/2008
 

Abstract

In 2007 the total of all economic costs per acre for growing corn in Illinois averaged $563 in the northern section, $554 in the central section for farmland with “high” soil ratings, $526 in the central section for farmland with “low” soil ratings, and $484 in the southern section. Soybean costs per acre were $441 in Northern Illinois, $427 in central Illinois (high productivity farmland), $394 in central Illinois (low productivity farmland) and $366 in southern Illinois.
 
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Projected Corn and Soybean Returns in 2008
Gary Schnitkey and Dale Lattz
FEFO 07-18, 12/6/2007
 

Abstract

Corn production is projected more profitable than soybeans on highly productive farmland. Soybeans may be more profitable on less productive farmland.
 
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Non-Land Costs for Corn and Soybeans Projected to Increase in 2008
Gary Schnitkey and Dale Lattz
FEFO 07-17, 11/6/2007
 

Abstract

Crop costs for corn and soybeans continue to increase. For corn, non-land costs will be over $40 per acre higher in 2008 as compared to 2007. Non-land costs for soybeans are projected to be on average $16 to $18 per acre higher in 2008.
 
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Consider Higher Costs and Additional Risk When Negotiating 2008 Cash Rents
Gary Schnitkey
FEFO 07-12, 7/13/2007
 

Abstract

Caution should be exercised in increasing cash rents for 2008. If cash rents increase so that a farmer receives the same margin in 2008 as in 2001 through 2005, farmers will be in much riskier positions. In central Illinois, farmer margins need to more than double for farmers to be in the same risk position in 2008 as compared to 2001-2005.
 
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Crude Oil Price Variability and its Impact on Break-even Corn Prices
Gary Schnitkey, Darrel Good and Paul Ellinger
FEFO 07-11, 5/30/2007
 

Abstract

Besides potentially raising the average corn price, increasing use of corn to make ethanol likely will increase corn price variability.
 
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Cost to Produce Corn and Soybeans in Illinois-2006
Dale Lattz
FEFO 07-05, 3/27/2007
 

Abstract

In 2006 the total of all economic costs per acre for growing corn in Illinois averaged $502 in the northern section, $500 in the central section for farmland with “high” soil ratings, $472 in the central section for farmland with “low” soil ratings, and $448 in the southern section.
 
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Why Not All Corn?
Gary Schnitkey
FEFO 07-03, 2/23/2007
 

Abstract

Projected prices for the 2007 crop indicate that corn will be much more profitable than soybeans on Illinois, high-productivity farmland. A question is: Why plant soybeans at all?
 
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Corn Acre Changes Likely Will Vary by Region and Farm Size
Gary Schnitkey
FEFO 06-22, 12/19/2006
 

Abstract

If recent historical relationships continue, corn acres will increase more in northern Illinois than in central Illinois. Crop response in southern Illinois likely will be weather driven but increases are not likely to be as large as in northern Illinois. Furthermore, larger farms will increase corn acres more than smaller farms.
 
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Are Increasing Cash Rents Justified?
Gary Schnitkey, Dale Lattz
FEFO 06-21, 12/05/2006
 

Abstract

Because there is uncertainty about whether high commodity prices will actually occur, caution seems warranted in increasing cash rents. Even if long-run increases in commodity prices occur, farmers do not necessarily obtain long-run higher returns or risk reductions.
 
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2007 Crop Budgets Indicate Higher Returns for Corn and Wheat
Gary Schnitkey, Dale Lattz
FEFO 06-18, 10/30/2006
 

Abstract

Changes in relative prices have caused corn and wheat to have higher relative returns compared to soybeans. Hence, some farms may wish to consider switching acreages away from soybeans and more into corn.
 
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Future Increase in Corn Acres Will Vary Across the Corn-Belt
Gary Schnitkey
FEFO 06-15, 09/15/2006
 

Abstract

Profitability of corn versus soybeans over the greater corn-belt is evaluated. Current futures prices suggest that many farmers over much of the corn-belt will likely find corn production more profitable than soybean production in 2007 and 2008.
 
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Corn and Soybean Prices for More Corn in 2007
Gary Schnitkey and Darrel Good
FEFO 06-14, 08/15/2006
 

Abstract

Corn prices that make corn production more profitable than soybean production are calculated in this paper. Given a $6.00 per bu. Soybean price, breakeven corn prices range from slightly above $3.00 down to $2.50 for a range of yields typical of most Midwest farms.
 
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Has Variability in Corn Yields Been Reduced?
Gary Schnitkey
FEFO 06-12, 07/31/2006
 

Abstract

Yields from farms enrolled in Illinois Farm Business Farm Management (FBFM) were used to evaluate whether corn yield variability has been reduced since the 1980s. Evidence suggests that widespread yield losses occurred in 1983 and 1988. Losses as large as in 1983 and 1988 did not occur in the 1990s or early 2000s. Yield shortfalls, however, are still possible.
 
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Cost Increases: Its Not Just Energy
Gary Schnitkey and Dale Lattz
FEFO 06-11, 07/10/2006
 

Abstract

Recent attention has focused on how rising energy prices have increased grain production costs. However, energy is not the only factor causing cost increases.
 
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Costs to Produce Corn and Soybeans in Illinois -- 2005
Dale Lattz
FEFO 06-09, 06/01/2006
 

Abstract

Illinois FBFM records indicate that costs to produce corn and soybeans increased in 2005 compared to 2004.
 
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Costs and Fuel Use for Alternative Tillage Systems
Gary Schnitkey, Dale Lattz
FEFO 06-07, 04/19/2006
 

Abstract

Costs are examined for two systems that have little tillage and two systems that rely on tillage. The two “low” tillage systems have about $9.50 per acre less costs and between 1 and 2 gallons less fuel use than the two “tillage” systems.
 
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2006 Planting Decisions Given the March Planting Intentions Report
Gary Schnitkey
FEFO 06-06, 04/06/2006
 

Abstract

Revised price expectations may cause some farmers to revisit 2006 planting decisions, perhaps shifting some acres from soybeans to corn. Budgeting to compare crop profitability is a useful exercise. Consideration should be given to crop insurance payments as there is a high probability thatinsurance will make payments.
 
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How Bad Were 2005 Corn Yields?
Gary Schnitkey and Bruce Sherrick
FEFO 06-05, 03/10/2006
 

Abstract

Dry conditions over much of Illinois caused some counties to have corn yield losses over 20% of trend yields. While genetic improvements have occurred, large yield losses are still possible.
 
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New Crop Budgeting Tools Released on Farmdoc
Gary Schnitkey, Dale Lattz
FEFO 05-23, 12/23/2005
 

Abstract

New crop budgeting tools have been released on farmdoc. These tools allow users to 1) compare revenue and costs over time, 2) compare projected returns from corn, soybeans, and wheat, 3) evaluate cash rent bids, and 4) modify defaults to more accurately reflect individual farm situations.
 
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Projected Returns For Corn And Soybean In 2006
Gary Schnitkey, Dale Lattz
FEFO 05-22, 12/05/2005
 

Abstract

Illinois farmers have planted more corn acres and fewer soybean acres in recent years. The trend of increasing corn acres may stop in 2006 because projected corn costs have increased more than projected soybean costs. Budgets indicate that corn-after-corn may be less profitable than soybeans.
 
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Variable Cost Increases for Corn and Soybeans in Historical Perspective
Gary Schnitkey, Dale Lattz
FEFO 05-18, 09/30/2005
 

Abstract

On Illinois grain farms, variable costs for corn are projected to be $55 per acre higher in 2006 than in 2002. Similarly, variable costs for soybeans will be $20 per acre higher in 2006 than in 2002. In percentage terms, cost increases are 33% for corn and 19% for soybeans over the four-year period from 2002 to 2006. Increases of this magnitude have not occurred in recent history and will cause reductions in farm profitability. Further historical perspectives on these increases are provided in this article.
 
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2005 and 2006 Crop Budgets: Implications for Cash Rents and Production Decisions
Gary Schnitkey, Dale Lattz
FEFO 05-16, 08/30/2005
 

Abstract

Per acre corn and soybean returns in 2005 and 2006 are projected to be significantly lower than returns in 2003 and 2004. As a result, less funds will be available to pay cash rents in 2005 and 2006. Landlords and tenants may wish to renegotiate cash rents. Fertilizer and fuel costs have increased dramatically, causing soybean profitability to increase relative to corn profitability. Shifting acres to soybeans may be prudent. Also, reducing fertilization rates and eliminating tillage passes may be economical.
 
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Growth In Farm Size
Gary Schnitkey
FEFO 05-12, 06/25/2005
 

Abstract

Changes in tillable acres on farms enrolled in Illinois Farm Business Farm Management (FBFM) were calculated for the five-year period between 1999 and 2004. On average, farms increased tillable acres by 7%. However, considerable range in growth rates existed across farms. Over 40% of all farms lost acres during the period while 22% increased acres by more than 20%.
 
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Cost To Produce Corn And Soybeans In Illinois—2004
Dale Lattz
FEFO 05-09, 05/09/2005
 

Abstract

In 2004 the total of all economic costs per acre for growing corn in Illinois averaged $444 in the northern section, $434 in the central section for farmland with “high” soil ratings, $411 in the central section for farmland with “low” soil ratings, and $374 in the southern section. Soybean costs per acre were $349, $343, $319 and $289, respectively (see Table 1). Costs were lower in the southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $2.20 to $2.40 for corn and from $5.78 to $6.71 for soybeans. Variations in this cost were related to weather, yields, and land quality.
 
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A Soybean Rust Scenario Model: 2005 Crop Year Decision Making In Illinois
Gary Schnitkey
FEFO 05-05, 03/15/2005
 

Abstract

The 2005 crop will be particularly challenging for Illinois soybean producers. Soybean rust, a fungal disease, has moved up from South American and was found in the Southern US in the fall of 2004. This is the first discovery of the disease in the continental US. The disease is in the form of spores and can spread through airborne pathways over wide geographic areas (Isard et al, 20041). Weather patterns, especially those from the South to North, will be the main factor causing an outbreak in Illinois during the 2005 crop year.
 
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Corn Returns versus Soybean Returns: Do Farms Differ?
Gary Schnitkey, Dale Lattz
FEFO 05-01, 01/11/2005
 

Abstract

Farmers enrolled in Illinois Farm Business Farm Management (FBFM) have the option of receiving detailed enterprise reports by allocating whole-farm revenues and expenses to their various crop and livestock enterprises. This Facts and Opinions article summarizes results for farmers who produce corn and soybean enterprise reports. The goal of this summarization is to identify whether relative profits of corn and soybeans vary across farms. Also, factors that cause return differences are identified.
 
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The Economics Of Adding More Corn To Corn-Soybean Rotations
Gary Schnitkey, Dale Lattz
FEFO 04-20, 11/30/2004
 

Abstract

Some farmers are considering adding more corn to their rotations. This consideration likely arises because corn has generally been more profitable than soybeans in recent years. The recent introduction of soybean rust into the United States may also increase interest in adding more corn to rotations.
 
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2005 Corn And Soybean Revenue And Cost Estimates
Gary Schnitkey
FEFO 04-19, 11/22/2004
 

Abstract

Forecasts of revenue less variable costs, hereafter referred to as returns, for corn and soybeans are forecast for the following four region and yield categories: 1) northern Illinois, 2) central Illinois with high productivity farmland, 3) central Illinois with low productivity Illinois, and 4) southern Illinois. Forecasts are compared to historical returns for Illinois Farm Business Farm Management grain farms from 2000 to 2003 along with preliminary estimates of 2004 returns. Returns are available from the Historical Crop Costs tool available in the management section of farmdoc (http://www.farmdoc.uiuc.edu/manage/enterprise_cost/crop_revenue_less_variable_cost.html).
 
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Cost To Produce Corn And Soybeans In Illinois-2003
Dale Lattz
FEFO 04-07, 04/13/2004
 

Abstract

In 2003 the total of all economic costs per acre for growing corn in Illinois averaged $405 in the northern section, $407 in the central section for farmland with "high" soil ratings, $383 in the central section for farmland with "low" soil ratings, and $345 in the southern section. Soybean costs per acre were $330, $333, $305 and $273, respectively (see Table 1). Costs were lower in the southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $2.19 to $2.57 for corn and from $7.00 to $9.43 for soybeans. Variations in this cost were related to weather, yields, and land quality.
 
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Crop Costs On Illinois Grain Farms
Gary Schnitkey
FEFO 04-04, 03/09/2004
 

Abstract

In this article, crop costs on northern and central Illinois grain farms are examined. Crop costs, which include fertilizer, pesticide, and seed costs, are related to yields, profits and tillable acres. Results suggest that crop costs are not highly correlated with yields, profits, or acres farmed.
 
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What Do 2003 Corn And Soybean Yields Indicate About Future Yields?
Gary Schnitkey
FEFO 03-22, 11/30/2003
 

Abstract

Yields on many Illinois farms in 2003 can be summarized using six words: excellent corn yields, poor soybean yields. In this article, we compare 2003 corn and soybean yields to historical yields. This examination indicates that it is unusual to have an above average corn yield in the same year as a below average soybean yield. However, this examination does not suggest that the long-term relationship between corn and soybean yields has changed.
 
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Higher Grain Prices Result In Less Loan Deficiency Payment Activity
Gary Schnitkey, Dale Lattz
FEFO 03-21, 11/11/2003
 

Abstract

The last two farm bills implemented in 1996 and 2002 contained provisions for nonrecourse marketing assistance loans and loan deficiency payments (LDP's). In essence, these programs place floors under prices that farmers could receive at loan rates. When cash prices are below loan rates, farmers can receive LDPs. Another alternative is to use marketing loan provisions that allow producers (under certain conditions) to take out marketing loans on grain at loan rates. When cash prices are below loan rates, farmers can repay a 9-month nonrecourse commodity loan at less than the loan rate, plus accrued interest and other charges or receive an LDP in lieu of obtaining a loan. In other words, generally speaking, if local cash prices were below the commodity loan rate, producers could receive the difference through either a market loan gain or an LDP. If this was the case, most producers took advantage of the program by taking an LDP. Current loan rates in Illinois for corn, soybeans and wheat average about $2.06, $5.16 and $2.59 respectively. These rates vary by county.
 
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Understanding USDA Corn And Soybean Production Estimates
Darrel Good, Scott Irwin
FEFO 03-20, 11/07/2003
 

Abstract

Recent comments from producers and others suggest that there is an ongoing misunderstanding of US Department of Agriculture (USDA) motives, methods and procedures used to arrive at production forecasts for corn and soybean crops. This was vividly illustrated by comments from producers, commodity analysts and farm market advisory services following the release of the August 2003 forecasts. Some in the agricultural community apparently even believe that the USDA manipulates crop forecasts to fulfill some mystical objectives that are contrary to the best interest of farmers. The purpose of this article is to improve understanding of USDA crop forecasting methods, performance and market impact.
 
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Projected And Historical Crop Returns: Keep Soybeans In 2004
Gary Schnitkey
FEFO 03-19, 11/07/2003
 

Abstract

Recently the wisdom of growing soybeans in Illinois has been questioned. In 2003, many Illinois farms experienced above average corn yields and below average soybean yields, leading to much higher returns for corn than for soybeans. In the long-run, soybean prices may decline relative to corn prices because of increased soybean production in South America. In September 2002, we suggested that planning prices for 2003 harvest-time supported planting more corn and wheat and less soybeans (see "Crop Rotations in 2003: More Corn and Wheat". Illinois Farm Economics: Facts and Opinions. September 23, 2002).
 
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Crop Acre Changes On Illinois Farm Business Farm Management Farms, 1995 Through 2002
Gary Schnitkey
FEFO 03-18, 09/28/2003
 

Abstract

This newsletter reports acres in corn, soybeans, wheat, forages, and other crops on Illinois Farm Business Farm Management (FBFM) farms from 1995 through 2002. Total acres in crops across all farms do not change much from year to year. In contrast, crop acres on individual farms can change dramatically. Individual farms within FBFM average a switch between crops of 9% per year.
 
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Release of Crop Budgeting Tool
Gary Schnitkey
FEFO 03-13, 07/22/2003
 

Abstract

A new Crop Budgeting Tool has been released on farmdoc. Crop Budgeting compares the costs and returns from alternative crops and determines the funds available to pay for cash rent. This tool is part of FAST, a series of Microsoft Excel spreadsheets that aid farmers in economic decision-making. The spreadsheet is available in the “FAST Tools” section of farmdoc or by clicking here.
 
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Cost to Produce Corn and Soybeans in Illinois -- 2002
Dale Lattz
FEFO 03-08, 04/25/2003
 

Abstract

In 2002, the total of all economic costs per acre for growing corn in Illinois averaged $411 in the northern section, $416 in the central section for farmland with "high" soil ratings, $391 in the central section for farmland with "low" soil ratings, and $350 in the southern section. Soybean costs per acre were $337, $341, $312 and $275, respectively (see Table 1). Costs were lower in the southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $2.59 to $3.61 for corn and from $6.24 to $8.09 for soybeans. Variations in this cost were related to weather, yields, and land quality. Southern Illinois had the highest costs per bushel to produce corn and soybeans because of below average yields caused by dry weather last summer.
 
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Can 1988 Drought Yields Occur Again in Northern and Central Illinois?
Gary Schnitkey
FEFO 03-06, 03/30/2003
 

Abstract

Questions have been raised whether widespread low yields have been eliminated in northern and central Illinois. It has been suggested that a drought in 2003 would not cause yields to decline as much as happened during the 1988 drought. Arguments include the fact that corn hybrids and soybean varieties have improved and can now withstand more adverse conditions. Within recent years, county yields in northern and central Illinois have been relatively stable, suggesting that low yields are less likely to occur. In addition, some areas in northern and central Illinois had low rainfall in 2002. In many of these areas, yields were only slightly below average suggesting that yields have become less sensitive to adverse weather.conditions. Within recent years, county yields in northern and central Illinois have been relatively stable, suggesting that low yields are less likely to occur. In addition, some areas in northern and central Illinois had low rainfall in 2002. In many of these areas, yields were only slightly below average suggesting that yields have become less sensitive to adverse weather.Fuel prices have increased substantially primarily due to concerns over supply disruptions that may occur in the Middle East. These price increases have lead to higher projected production costs for corn and soybeans in 2003. This paper discusses increases in fuel, nitrogen, and drying costs that may occur.
 
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Increases in Fuel Related Costs Lead to Higher Production Costs
Gary Schnitkey
FEFO 03-05, 03/19/2003
 

Abstract

Fuel prices have increased substantially primarily due to concerns over supply disruptions that may occur in the Middle East. These price increases have lead to higher projected production costs for corn and soybeans in 2003. This paper discusses increases in fuel, nitrogen, and drying costs that may occur.
 
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Historical Cropping Patterns on Illinois Grain Farms
Dale Lattz
FEFO 03-04, 02/28/2003
 

Abstract

The 2002 Farm Bill adjusted loan rates for the two primary crops grown in Illinois, corn and soybeans. The loan rate increased for corn and decreased for soybeans. This change along with the long term prospect of lower soybean prices due to increased production in South America has spurred discussion of a potential shift to more corn and less soybean acreage in Illinois. Other agronomic and economic factors along with the relative price of corn and soybeans will be taken into consideration by producers if and when adjustments are made in their cropping rotations.
 
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Time to Check Corn and Soybean Yields
Gary Schnitkey
FEFO 02-24, 12/31/2002
 

Abstract

Enactment of the 2002 Farm Bill, along with a recent change in relative corn and soybean prices, has caused corn to be more profitable when compared to soybeans. As a result, Illinois farmers may be considering planting more corn acres and less soybean acres.
 
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Crop Rotations in 2003: More Wheat and Corn?
Gary Schnitkey, Dale Lattz
FEFO 02-17, 09/23/2002
 

Abstract

During 2002, market prices for corn, soybeans, and wheat have increased dramatically potentially changing relative profits of crops. This paper examines profits for corn, soybeans and wheat using estimated prices for 2003 crops. Calculations show that wheat and corn is more profitable than soybeans. The remainder of this paper details these changes in profitability. Farmers should revisit crop rotation decisions. Planting more corn and more wheat while planting fewer soybeans may be economically advisable. Farmers, however, should not totally rely on averages shown in this paper. Farmers should use their own yields and costs in making crop rotation choices.
 
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Corn and Bean Acreage in Illinois Under The 2002 Farm Bill
Gary Schnitkey, Dale Lattz
FEFO 02-14, 07/24/2002
 

Abstract

The 2002 Farm Bill alters loan rates such that corn production may become more profitable relative to soybean production. As a result, some Illinois farmers may increase corn acres while they decrease soybean acres. This newsletter analyzes the economics of such a switch by 1) describing features of the 2002 Farm Bill that increase the attractiveness of corn versus soybean production, 2) analyzing costs and returns for growing corn and soybeans under different rotations, and 3) analyzing how corn yields relative to soybean yields affect the decision to switch from soybean acres to corn acres.
 
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Cost to Produce Corn and Soybeans in Illinois--2001
Dale Lattz
FEFO 02-08, 04/17/2002
 

Abstract

In 2001, the total of all economic costs per acre for growing corn in Illinois averaged $429 in the northern section, $430 in the central section for farmland with "high" soil ratings, $415 in the central section for farmland with "low" soil ratings, and $374 in the southern section. Soybean costs per acre were $347, $351, $330 and $292, respectively (see Table 1). Costs were lower in the southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $2.48 to $2.70 for corn and from $6.49 to $7.23 for soybeans. Variations in this cost were related to weather, yields, and land quality.
 
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Average Prices Received for Corn and Soybeans, 1995 Through 2001
Gary Schnitkey, Dale Lattz
FEFO 02-07, 04/11/2002
 

Abstract

Average prices received for corn and soybeans by farmers enrolled in Illinois Farm Business Farm Management (FBFM) are reported in this paper. Also reported are average Loan Deficiency Payments (LDPs) and Market Loan gains received in Illinois. Farmers can use this information to evaluate their marketing programs.
 
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Revenue and Variable Costs for Corn and Soybeans
Gary Schnitkey
FEFO 02-01, 01/15/2002
 

Abstract

Revenue and variable costs associated with producing corn and soybeans in Illinois for the years between 1997 through 2001 have been updated for northern, central (high productivity farmland), central (low productivity farmland), and southern Illinois using data from farms enrolled in the Illinois Farm Business Farm Management (FBFM) Association. In addition, projected revenue and variable costs for 2002 are shown. There are four tables showing these budgets at the end of this report. Tables also are available in the management section of farmdoc (http://www.farmdoc.uiuc.edu/manage/enterprise_cost/crop_revenue_less_variable_cost.html). Highlights of the updates are presented below.
 
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Costs to Produce Corn and Soybeans in Illinois -- 2000
Dale Lattz
FEFO 01-10, 05/02/2001
 

Abstract

In 2000, the total of all economic costs per acre for growing corn in Illinois averaged $433 in the northern section, $433 in the central section with the higher soil ratings, $399 in the central section with the lower soil ratings, and $358 in the southern section. The soybean costs per acre were $357, $360, $323 and $286 respectively (see Tables 1 and 2). Costs were lower in the southern section primarily because land costs are lower there. The total of all economic costs per bushel in the different sections of the state ranged from $2.40 to $2.78 for corn and from $6.36 to $7.76 for soybeans. Variations in this cost were related to weather factors, yields, and land quality.
 
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A Switch to Soybean Acres In Illinois?
Dale Lattz
FEFO 01-08, 04/05/2001
 

Abstract

In 2001, some analysts are suggesting that more soybeans and less corn will be planted in Illinois. This shift is expected because production costs have increased less for soybeans than for corn. In addition, the loan rate for soybeans compared to the loan rate for corn is out of line compared to historical average prices and favors soybean production. Budgets comparing the advisability of shifting from corn to soybeans are presented in this paper.
 
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Do You Really Need to Know Production Costs?
Gary Schnitkey
FEFO 01-06, 03/20/2001
 

Abstract

Recently, a number of individuals have been stressing the need for farmers to know their per bushel costs of producing corn and soybeans. Much of this current emphasis revolves around developing marketing plans under which farmers set pricing objectives based on their break-even cost levels.
 
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Production Costs for Corn and Soybeans Projected to Rise in 2001
Gary Schnitkey
FEFO 00-02, 12/05/2000
 

Abstract

Crop production costs in 2001 will be higher than 2000 production costs. Fuel, nitrogen fertilizer, and drying costs contribute to this increase.
 
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