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Farm Economics Facts and Opinions (FEFO) Archive

Profit Margins Continue Negative Trend in 2013, Likely to Turn Positive in 2014
Bradley L. Zwilling
FEFO 14-24, 12/19/2014
 
No Abstract Available
 
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Base Acre and Yield Updating Tool: A Release of Spreadsheet to Aid in Making Farm Bill Decisions
Gary Schnitkey
FEFO 14-23, 12/9/2014
 

Abstract

The Base Acre and Yield Updating spreadsheet aids in making the first two sets of Farm Bill decisions: 1) base acre allocation and 2) yield updating. It also makes comparisons of expected payments from Agricultural Risk Coverage – County Option (ARC-CO) and Price Loss Coverage (PLC) programs calculated by Agricultural Policy Analysis System.
 
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Discussion of Fixed Cash Lease (Short Form for One Year)
Donald L. Uchtmann and Gary Schnitkey
FEFO 14-22, 11/25/2014
 

Abstract

A new farmland lease form called “Fixed Cash Lease (Short Form for One Year)” is now available on farmdoc. This lease is for a fixed cash rent that is one-year in length.
 
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Overview of Commodity Program Decisions from the 2014 Farm Bill
Gary Schnitkey, Carl Zulauf, Jonathan Coppess, and Nick Paulson
FEFO 14-21, 11/18/2014
 

Abstract

This article provides an overview of the commodity program decisions of the 2014 Farm Bill, thereby provide a context for each decision that must be made. More details for each decision are available on the Farm Bill Toolbox
 
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Crop Insurance Revenue Guarantees Likely Lower in 2015
Gary Schnitkey
FEFO 14-20, 11/7/2014
 

Abstract

Next year, crop insurance guarantees likely will be lower than those for recent years. As a result, farmers will face more downside revenue risks. Revenue guarantees for crop insurance products will be below total costs of production.
 
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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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Cash Rents in 2014 and Expected Cash Rents in 2015
Gary Schnitkey
FEFO 14-16, 9/9/2014
 

Abstract

Expected 2015 rents point to decreasing cash rent levels on professionally managed farmland. Whether or not other cash rents follow professionally managed cash rents down is an open question.
 
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Farmland Price Outlook in 2014 and Beyond
Gary Schnitkey, Bruce Sherrick and Todd Kuethe
FEFO 14-15, 8/19/2014
 

Abstract

Decreases in cash rents are not likely to cause substantial farmland price decreases. A larger risk factor for farmland price declines are increasing interest rates.
 
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Supplemental Coverage Option (SCO) in Wheat
Gary Schnitkey
FEFO 14-14, 8/5/2014
 

Abstract

The basics of SCO are illustrated with an example from Washington County, Illinois. SCO will have risk management benefits when the maximum coverage level for the COMBO product is 75%. In counties where 85% coverage levels are available, SCO products offer limited potential to reduce the probability of low gross revenues.
 
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Release of 2015 Crop Budgets
Gary Schnitkey
FEFO 14-13, 7/8/2014
 

Abstract

Projections in 2015 budgets indicate that 2015 returns will be at the same levels as 2014 returns, which are considerably lower than returns from 2010 through 2013. These lower returns signal the need to reduce 2015 cash rents.
 
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Prospects for Grain Farm Incomes in 2014
Gary Schnitkey
FEFO 14-12, 6/24/2014
 

Abstract

Average grain farm incomes in 2014 likely will be much lower than 2013 incomes. Corn prices near $4.20 per bushel combined with above average yields could result in average incomes on grain farms in Illinois around $45,000 per farm, slightly below the average for the years from 1996 through 2005.
 
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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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Coverage Levels on Crop Insurance and the SCO Alternative
Gary Schnitkey and Bruce Sherrick
FEFO 14-09, 4/29/2014
 

Abstract

Coverage level choices tend to be highest for corn and soybeans in the heart of the Corn Belt. Because SCO will be more attractive where lower coverage levels predominate, SCO use likely will be more attractive outside of the Corn Belt.
 
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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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Cost to Produce Corn and Soybeans in Illinois-2013
Brandy M. Krapf, Dwight D. Raab, and Bradley L. Zwilling
FEFO 14-06, 3/21/2014
 
No Abstract Available
 
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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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2014 Crop Insurance Decisions: The 2014 Farm Bill and 2014 Product Recommendations
Gary Schnitkey
FEFO 14-04, 2/11/2014
 

Abstract

Because the 2014 Farm Bill does not change crop insurance programs in 2014, the 2014 Farm Bill will not impact 2014 crop insurance decisions. Like last year, most farmers will find adequate protection with a Revenue Protection (RP) policy at a 75% or higher coverage level using enterprise units and the Trend Adjusted Yield Endorsement.
 
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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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Coverage Level Choices for Revenue Protection in 2014
Gary Schnitkey
FEFO 14-02, 1/8/2014
 

Abstract

Over time, farmers have increased coverage levels on crop insurance. Perhaps this trend will not continue into 2014. However, lowering coverage levels will expose farmers to the potential of larger losses.
 
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Area Risk Protection Insurance Policy: Comparison to Group Plans
Gary Schnitkey
FEFO 14-01, 1/7/2014
 

Abstract

RMA has introduced a new county-level crop insurance product called the Area Risk Protection Insurance policy Coverage under ARPI is similar to Group policies.
 
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Crop Insurance Premiums and Guarantee Levels for 2014
Gary Schnitkey
FEFO 13-23, 12/10/2013
 

Abstract

For corn, insurance premiums likely will be slightly lower than in 2013. Guarantees will be much lower in 2014 as compared to 2013.
 
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High Cash Rents and Farmer Returns
Gary Schnitkey
FEFO 13-22, 12/3/2013
 

Abstract

Farmer returns are estimated for average and “high” cash rents. Farmers with average cash rents are projected to have marginal returns in 2014. Losses around $60 per acre range are projected to occur with “high” cash rents.
 
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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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Proportion of Farms with High Cash Rent Percentages and Levels
Gary Schnitkey
FEFO 13-20, 10/29/2013
 

Abstract

About 4% of the grain farms in Illinois cash rent 90% of there at average cash rents $25 per acre higher than county averages. These farms are the ones most to face the need to adjust cash rents downward.
 
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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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2013 County Cash Rents: Levels, Variability, and 2014 Cash Rent Decisions
Gary Schnitkey
FEFO 13-17, 9/10/2013
 

Abstract

Average cash rents by county were released on September 6th by the National Agricultural Statistical Service (NASS), an agency of the U.S. Department of Agriculture. These county cash rents are used to develop a relationship between average rents and expected corn yields.
 
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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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Farm and Family Living Income and Expenses for 2012
Brandy M. Krapf, Dwight D. Raab, and Bradley L. Zwilling
FEFO 13-15, 8/16/2013
 

Abstract

In 2012, the total noncapital living expenses of 1,300 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $76,668--or $6,389 a month for each family. This average was 6.6 percent higher than in 2011.
 
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Share-Rent Landowner Returns Compared to Cash Rents
Gary Schnitkey
FEFO 13-14, 8/13/2013
 

Abstract

Share-rent landowner returns are compared to cash rents in central Illinois. Between 2006 and 2012, share-rent returns were above average cash rents and roughly similar to the average cash rents on professionally managed farmland.
 
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Illinois Farm Real Estate Increases 16.4% for 2013
Bradley L. Zwilling
FEFO 13-13, 8/8/2013
 

Abstract

Each year the National Agricultural Statistics Service (NASS) of the USDA releases estimated average farm real estate values by state. The methodology and timing of the study has changed over time but the statistical information provides some insight as to the changes in farm real estate values from year to year.
 
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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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2013 Net Incomes for Grain Farms Likely Below Levels in Recent Years
Gary Schnitkey
FEFO 13-11, 7/10/2013
 

Abstract

Near normal yields and commodity prices near current forward price bids will result in less income on grain farms in 2013 as compared to incomes in recent years
 
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Prevented Planting Payments versus Planting Soybeans
Gary Schnitkey
FEFO 13-10, 6/18/2013
 

Abstract

Returns from taking prevented planting payments are compared to planting soybeans in late June. A corn prevented planting payments almost always will be larger than the expected returns from planting soybeans. Prevented planting payments for soybeans become more attractive as soybean plantings are delayed further.
 
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Balance Sheets on Grain Farms from 2005 to 2011
Ben Hugenberg and Gary Schnitkey
FEFO 13-09, 5/14/2013
 

Abstract

The period of high grain farm incomes since 2006 has led to an overall strengthening of balance sheets on grain farms. Some concerns exist that much of this strengthening could erode quickly during a period of lower returns and declining farmland prices. While these concerns are legitimate, farmers have generally prepared themselves well to withstand lower returns.
 
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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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The 2013 Acre Decision
Gary Schnitkey
FEFO 13-07, 4/23/2013
 

Abstract

Farmers and landowners have until June 3rd to enroll their Farm Service Agency (FSA) farms into the Average Crop Revenue Election (ACRE) program, an alternative within the 2008 Farm Bill to the Direct and Counter-Cyclical program (DCP). While ACRE likely will pay less than DCP, enrollment in ACRE may still be advisable as ACRE will make large payments if revenue is low.
 
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2013 Cash Rents on Professionally Managed Farmland in Illinois
Gary Schnitkey
FEFO 13-06, 4/9/2013
 

Abstract

Rents on professional managed farmland will be higher in 2013 than in 2012, continuing a string of years of cash rent increases. The increase in 2013 is less than that which occurred between 2011 and 2012.
 
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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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GRIP-HR: A Good Product for 2013
Gary Schnitkey
FEFO 13-03, 2/12/2013
 

Abstract

Group Risk Income Plan with the Harvest Revenue Option (GRIP-HR) has features that make it an attractive crop insurance product this year. GRIP-HR will make large payments in a drought year and also in years of large price declines.
 
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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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Per Acre Non-land Costs of Grain Farms of Different Sizes
Gary Schnitkey
FEFO 12-24, 12/18/2012
 

Abstract

Costs across different size grain farms are examined. Non-land costs do not vary across farms of different size. Land costs tend to increase with farm size.
 
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2013 Net Farm Income Projections
Gary Schnitkey
FEFO 12-23, 11/20/2012
 

Abstract

Overall, 2013 currently is projected as a good income year for crop farms. Worst case incomes will be influenced by projected prices and coverage level choices. Likely projected prices will provide significant downside risk protection given that relatively high crop insurance coverage levels are selected.
 
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Landowner and Farmer Returns under Share Rental Arrangements with Differing Prices
Gary Schnitkey
FEFO 12-22, 10/23/2012
 

Abstract

Landowner and farmer share of returns are shown under share rent and a 40% of crop revenue leases, two arrangements that exists in practice. Resulting returns will show the variability in returns likely to be experienced, and also illustrate the downward pressure cash rents may face when prices decline to likely long-run levels.
 
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Cash Rents Given Differing Price Levels
Gary Schnitkey
FEFO 12-21, 10/16/2012
 

Abstract

The ability to pay cash rent is examined under three corn and soybean price scenarios: 1) 2013 price estimates, 2) long-run price estimates, and 3) low price estimates. The 2013 price projections yield returns that can sustain high cash rents. Lower prices likely will lead to downward pressure on cash rents.
 
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Cash Rents in 2012 and 2013
Gary Schnitkey
FEFO 12-20, 9/11/2012
 

Abstract

According to the National Agricultural Statistical Service (NASS), Illinois cash rents in 2012 increased by 16% over 2011 levels. Cash rents increases between 2012 and 2013 likely will not be as large.
 
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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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Illinois Farm Real Estate Continues Double Digit Increase
Bradley L. Zwilling
FEFO 12-18, 8/7/2012
 

Abstract

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values by state. The estimates are based on surveys of farmers from selected geographical areas.
 
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Consider Hedging RP Guarantee Before Harvest
Gary Schnitkey
FEFO 12-17, 7/24/2012
 

Abstract

During short crop years, corn and soybeans prices often peak early and then decline throughout the remainder of the marketing year. This suggests that producers may wish to consider pricing some grain before harvest. This is particularly true for farmers who insured using Revenue Protection (RP) insurance.
 
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Price Loss Coverage in the House Discussion Bill and Acreage Decisions
Gary Schnitkey and Carl Zulauf
FEFO 12-16, 7/12/2012
 

Abstract

The House Discussion Draft of the Farm Bill includes a target price program called Price Loss Coverage (PLC). Parameters of the House Bill cause estimated payments from PLC to be higher for wheat, rice, and peanuts than for corn and soybeans, potentially impacting acreage decisions.
 
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Grain Farm Income Prospects Given Drought Conditions in 2012
Gary Schnitkey
FEFO 12-15, 6/28/2012
 

Abstract

Low corn and soybean yields are increasingly likely as hot, dry weather is forecast to continue. Because prices likely will increase with lower yields, grain farm incomes likely will be above projections made in winter of 2012. However, some farms will suffer losses.
 
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Differences across Crops in Spending Under the 2012 Senate Agriculture Committee Farm Bill
Gary Schnitkey
FEFO 12-14, 6/13/2012
 

Abstract

The Farm Bill passed by the Senate Agriculture Committee has commodity program payments tied to risk management through such program as Agricultural Risk Coverage (ARC) and cotton STAX.  This emphasis differs from the 2008 Farm Bill where most commodity title payments are direct payments.  The emphasis shift from direct payments to risk management changes the mix in spending across crops
 
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Performance of the Super Committee Target Price Proposal
Gary Schnitkey
FEFO 12-13, 6/5/2012
 

Abstract

An analysis is presented of the target price option contained in the Farm Bill proposal made as part of Super Committee deliberations last year. Frequency of payments will vary across crops because the relationship between the proposed target price and long-run price varies across commodities.
 
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Net Returns with ARC under Differing Price Scenarios
Gary Schnitkey
FEFO 12-12, 5/22/2012
 

Abstract

Net returns including Agricultural Risk Coverage (ARC) payments are examined. At $4.00 per bushel and below corn prices, ARC will make payments, aiding in cushioning revenue losses. However, ARC payments are not large enough is assure profits.
 
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ARC and Multi-Year Price Declines
Gary Schnitkey
FEFO 12-11, 5/9/2012
 

Abstract

The Senate Agriculture Committee recently passed a version of a Farm Bill that replaces direct, counter-cyclical, and SURE payments with Agricultural Risk Coverage (ARC). Payments under ARC are evaluated for differing price scenarios
 
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Impacts of Limits on Crop Insurance Risk Subsidies
Gary Schnitkey
FEFO 12-10, 5/1/2012
 

Abstract

Discussion has centered on limiting crop insurance risk subsidies.  Between 2006 and 2012, acres required to reach the limit for average farms in Illinois are between 1,600 and 2,700 acres, not particularly large grain farms. 
 
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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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Projected Corn-Soybean Returns Do Not Suggest Shift to Corn in Illinois: An Application of the Planting Decision Model
Gary Schnitkey
FEFO 12-08, 3/27/2012
 

Abstract

Returns projected using 2012 default budgets in the Corn-Soybeans Rotation Tool  indicate that corn-soybean rotations have higher projected returns than continuous corn, given that commodity prices are at current harvest-time bids.
 
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Will Acre Pay in 2011 and 2012?
Gary Schnitkey
FEFO 12-07, 3/13/2012
 

Abstract

ACRE is not likely to make payments on Illinois crops in either 2011 or 2012.
 
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Crop Insurance Use in 2011 and Suggestions for 2012
Gary Schnitkey
FEFO 12-06, 2/28/2012
 

Abstract

In 2011, most corn and soybean acres in Illinois were insured using Revenue Protection (RP) at a 75% or higher coverage level.  At these coverage levels, most acres where insured using enterprise units.  Similar percentages are likely in 2012.
 
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Grip Payments in 2011
Gary Schnitkey
FEFO 12-05, 2/24/2012
 
No Abstract Available
 
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Is RP With the Harvest Price Exclusion a Good Option for 2012?
Gary Schnitkey
FEFO 12-04, 2/20/2012
 

Abstract

Revenue Protection (RP) with Exclusion is a viable alternative to RP, particualarly if RP with Exclusion is purchased at a 5 percent higher coverage level.
 
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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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Group Risk Income Plan (GRIP) in 2012
Gary Schnitkey
FEFO 12-02, 1/24/2012
 

Abstract

GRIP premiums will increase in 2012 due to re-ratings. This may lead some farmers to re-evaluated using GRIP.
 
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COMBO Crop Insurance Premium Changes in 2012
Gary Schnitkey and Bruce Sherrick
FEFO 12-01, 1/18/2012
 

Abstract

Reductions in 2012 Revenue Protection crop insurance for corn and soybean policies in Illinois are shown in this paper.
 
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Trend-Adjusted APH Yield Endorsement
Bruce Sherrick and Gary Schnitkey
FEFO 11-23, 12/6/2011
 

Abstract

Beginning with the 2012 crop year, farmers purchasing crop insurance for corn and soybeans in fourteen Midwestern states will have the option to use the Trend-Adjusted Actual Production History (TA-APH) Yield Endorsement. The TA-APH yield endorsement allows farmers to increase yields used in calculating crop insurance guarantees.
 
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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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What is in an Average Cash Rent?
Gary Schnitkey
FEFO 11-21, 11/15/2011
 

Abstract

Published average cash rents mask the variability that exists in the farmland rental markets. This article develops a distribution of farm rents to average county cash rents. Only 35 percent of farm rents are within $20 of county averages.
 
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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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Cash Rent With Bonus Leasing Arrangement: Description and Example
Gary Schnitkey
FEFO 11-17, 9/27/2011
 

Abstract

A “cash rent with bonus” leasing arrangement is a variable cash rent lease that has a base rent and the potential for a bonus if crop revenue exceeds target revenue. Variable lease rental arrangements have become more popular in recent years as crop prices have become more variable, thereby making it more difficult to determine satisfactory cash rents. This document describes details of cash rent with bonus arrangements
 
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Cash Rent Information Available for Setting 2012 Rents
Gary Schnitkey
FEFO 11-16, 9/13/2011
 

Abstract

This article shows 2011 cash rents by county and Illinois Society 2011 rents and projected 2012 rents by productivity class.
 
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2011 Illinois Farmland Values Increase 18 Percent
Gary Schnitkey
FEFO 11-15, 8/9/2011
 

Abstract

According to an August 4th report released by the U.S. Department of Agriculture, Illinois farmland price averaged $5,800 per acre in 2011, an increase of 18 percent over the 2010 level of $4,900. Analysis suggest farmland prices are in line with return and interest rate levels.
 
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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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Planting Delays and Switching to Soybeans: A New Fast Spreadsheet
Gary Schnitkey and Ryan Batts
FEFO 11-08, 4/27/2011
 

Abstract

Based on defaults in a Planting Decision Model, switching from soybean on farmland scheduled to be planted to corn is several weeks away.
 
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Performance of Publicly-Traded Agricultural Firms Since 2007
Clay Kramer and Gary Schnitkey
FEFO 11-07, 4/13/2011
 

Abstract

From 2007 to the present, publicly traded companies dealing with crop farms have had larger market value increases than companies contained in the S&P 500.
 
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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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Crop Insurance in 2011
Gary Schnitkey
FEFO 11-04, 3/11/2011
 

Abstract

Most Illinois farmers will purchase RP or GRIP-HR for insuring corn and soybeans.
 
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Higher 2011 GRIP Premiums Still Below Expected Payments
Gary Schnitkey and Bruce Sherrick
FEFO 11-03, 2/23/2011
 

Abstract

GRIP-HR premiums will be higher in 2011 than in 2010. Over much of Illinois, expected payments are projected to exceed farmer-paid premiums.
 
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Premiums on Farm-Level Revenue Crop Insurance Products Higher in 2011
Gary Schnitkey and Bruce Sherrick
FEFO 11-02, 1/28/2011
 

Abstract

The 2011 premiums for Revenue Protection, a farm-level crop insurance product, will be considerably higher than 2010 products primarily due to higher projected prices and volatilities.
 
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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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Farmland Price Outlook: Are Farmland Prices Too High Relative to Returns and Interest Rates
Gary Schnitkey
FEFO 10-17, 10/18/2010
 

Abstract

Farmland prices are likely to increase over the next year due to higher commodity prices. The possibility of interest rate increases poses a risk for declining farmland prices.
 
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2008 SURE Window Closes September 30
Gary Schnitkey
FEFO 10-16, 9/24/2010
 

Abstract

SURE program deadline is approaching for the 2008 year. Most Illinois farms will not receive payments, but those that do may receive large SURE payments.
 
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COMBO’s Product Released for 2011 Crop Insurance Year
Gary Schnitkey
FEFO 10-15, 8/30/2010
 

Abstract

The COMBO product is being released to insure 2011 crops. Revenue Protection, Yield Protection, and Revenue Protection with Exclusion plans in the COMBO policy replace CRC, RA, IP, and APH policies.
 
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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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Illinois Farm Real Estate Values Continue on Upward Trend
Bradley L. Zwilling
FEFO 10-13, 8/13/2010
 

Abstract

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state.
 
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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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Estimated 2009 and 2010 ACRE Payments
Gary Schnitkey
FEFO 10-09, 4/28/2010
 

Abstract

For 2009, state ACRE payments in Illinois are estimated at $27 per acre for corn, $0 for soybeans, and $90 for wheat. For 2010, state ACRE payments are estimated at $41 per acre for corn, $14 for soybeans, and $33 for wheat.
 
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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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County Cash Rents in 2009
Gary Schnitkey
FEFO 10-07, 4/12/2010
 

Abstract

The National Agricultural Statistical Service (NASS) recently released their estimates of average cash rents per county for 2009. Forty-one percent of the counties had cash rent increases while 37% had decreases.
 
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Illinois Corn and Soybean Yields and GRIP Payments in 2009
Gary Schnitkey
FEFO 10-06, 4/5/2010
 

Abstract

Corn yields in 2010 were generally above trend, except for some counties in northern Illinois. Soybeans yields were mixed. GRIP payments for corn will occur in six counties. Soybean GRIP payments will occur in Jasper County.
 
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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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GRIP Premiums in 2010
Gary Schnitkey
FEFO 10-04, 3/11/2010
 

Abstract

Group Risk Income Plan (GRIP) is a county revenue product that bases guarantees and payments on county yields rather than on farm yields. Premiums on GRIP products have changed between 2009 and 2010, with most counties experiencing premium declines. Premiums on GRIP with the harvest revenue option (GRIP-HR) for corn at the 90% coverage level and 100% protection level have an average premium reduction of $15 per acre across all Illinois Counties.
 
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2010 Crop Insurance Update: Model Programs and Common Questions
Gary Schnitkey
FEFO 10-03, 3/5/2010
 

Abstract

Most Illinois and Midwest farmers will find crop insurance choice coming down to one of the following two programs: Crop Revenue Coverage (CRC) or Revenue Assurance with the harvest price option (RA-HP); Group Risk Income Plan with the harvest revenue option (GRIP-HR). These programs are specified given that the farm faces risk that cannot be self insured. Reasons why these two programs are the most advantageous are covered by answering the following commonly asked questions.
 
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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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ACRE Payment Estimates: Release of FAST ACRE Payment Estimator
Gary Schnitkey
FEFO 09-19, 12/21/2009
 

Abstract

A new Microsoft Excel spreadsheet has been developed to estimate the amount of Average Crop Revenue Election (ACRE) payments a farm will receive for the 2009 crop.
 
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Profit Margins Turn Negative in 2008, Likely to Continue with Projected Low Milk Prices in 2009
Bradley L. Zwilling
FEFO 09-18, 11/30/2009
 

Abstract

Higher milk prices were not enough to offset higher costs resulting in total economic costs exceeding returns for Illinois dairy producers in 2008, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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Late Planting Wheat and Crop Insurance
Gary Schnitkey
FEFO 09-17, 10/29/2009
 

Abstract

Wheat plantings have been delayed this fall, again bringing up decisions related to crop insurance. APH, CRC, and RA policies have late planting and prevented planting provisions.
 
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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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A Historic Look at Illinois Farm Real Estate Values
Bradley Zwilling
FEFO 09-15, 10/9/2009
 

Abstract

The U.S.D.A. estimates that land values have declined slightly in Illinois.
 
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Crop Priority in ACRE
Gary Schnitkey
FEFO 09-14, 9/18/2009
 

Abstract

Farmers who signed up for the Average Crop Revenue Election (ACRE) can change their crop priority by September 30. Priorty will matter only to farms where planted acres times 1.2 exceeds total base acres.
 
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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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ACRE Will Likely Pay More than the Traditional Alternative for Receiving Farm Commodity Payments
Gary Schnitkey and Nick Paulson
FEFO 09-12, 8/5/2009
 

Abstract

Based on historical experience for corn, soybean, and wheat acres in Illinois, the ACRE program is expected to generate payments that exceed the direct payments given up to enroll in the program over time. The chance of ACRE payments being triggered for corn, soybeans, and wheat in 2009 is projected to be higher than average.
 
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Historical Analysis of ACRE
Gary Schnitkey and Nick Paulson
FEFO 09-11, 7/20/2009
 

Abstract

We conducted an historical analysis of the Average Crop Revenue Election (ACRE) program using data from 1977 through 2007. This analysis provides indications of: the frequency of ACRE payments, the size of ACRE payments, and the frequency farm triggers are met.
 
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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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Late Planting and Crop Insurance
Gary Schnitkey
FEFO 09-09, 6/1/2009
 

Abstract

Adverse planting conditions this spring has resulted in many crop insurance questions related to replant, prevented planting, and late planting provisions in crop insurance contracts. This paper provides information on these questions.
 
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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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Five-Year Olympic Average Yields and ACRE
Gary Schnitkey
FEFO 09-07, 4/30/2009
 

Abstract

Five-year Olympic average yields will enter into the calculation of eligibility and amount of payments received under Average Crop Revenue Election (ACRE), an option made available in the 2008 Farm Bill for receiving commodity program payments. In this paper, differences in 2009 Olympic average yields across farms are examined using Illinois Farm Business Farm Management (FBFM) yield data.
 
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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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GRIP Provides Superior Price Protection to CRC or RA
Gary Schnitkey
FEFO 09-05, 3/9/2009
 

Abstract

If lower prices are a primary concern, Group Risk Income Plan (GRIP) at a 90% coverage level will provide superior protection compared to Crop Revenue Coverage (CRC) or Revenue Assurance (RA).
 
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The ACRE Program Decision and Some Illustrative Examples
Nicolas D. Paulson
FEFO 09-04, 2/27/2009
 

Abstract

A fundamental change in commodity title programs in the 2008 Farm Bill resulted in the creation of the new Average Crop Revenue Election Program (ACRE).
 
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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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Questions and Answers About the ACRE Provision of the 2008 Farm Bill
Dale Lattz, Gary Schnitkey and Nick Paulson
FEFO 09-01, 1/9/2009
 

Abstract

This document describes the ACRE program, a choice farmers have for receiving Federal farm commodity payments. This document describes the ACRE program, a choice farmers have for receiving Federal farm commodity payments.
 
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More Red Ink Expected for Hog Producers in 2008 After Experiencing Losses in 2007
Dale Lattz
FEFO 08-22, 12/29/2008
 

Abstract

Higher total costs mainly due to higher feed costs in 2007 resulted in Illinois hog producer profits decreased by $9.72 per hundredweight produced compared to 2006.
 
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Costs and Returns for Illinois Beef Producers in 2007
Dale Lattz
FEFO 08-21, 12/24/2008
 

Abstract

Total economic costs in 2007 for Illinois beef feeding enterprises exceeded total returns by $10.81 per 100 pounds of beef produced on 6 beef feeding farms.
 
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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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Landlord Returns From Illinois Farmland
Dale Lattz
FEFO 08-19, 11/14/2008
 

Abstract

Landlord’s net returns from farmland (based on typical crop share leases) reached a low point in 2001 and 2002. Net returns increased significantly the last two years.
 
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Returns Exceed Costs for Dairy Producers in 2007, Profit Margins Likely to Turn Negative in 2008
Dale Lattz
FEFO 08-18, 10/22/2008
 

Abstract

Higher milk prices more than offset higher costs resulting in returns exceeding total economic costs for Illinois dairy producers in 2007, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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2009 Rental Decisions Given Volatile Commodity Prices and Higher Input Costs
Gary Schnitkey and Dale Lattz
FEFO 08-17, 10/15/2008
 

Abstract

Turmoil within the financial sector has caused concerns about the performance of economies around the world.
 
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Increased Probabilities of Crop Insurance Payments
Gary Schnitkey and Bruce Sherrick
FEFO 08-16, 10/15/2008
 

Abstract

Recent commodity price declines have increased the probability that crop insurance products insuring revenue will make payments.
 
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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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Fourth Year in a Row of Double Digit Increases for Illinois Farm Real Estate Values
Dale Lattz
FEFO 08-14, 8/5/2008
 

Abstract

According to the U.S. Department of Agriculture, the average value of Illinois farm real estate was $5,000 per acre in 2008, 15.5 percent higher than the 2007 average of $4,330 per acre.
 
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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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Farm and Family Living Income and Expenses for 2007
Dale Lattz
FEFO 08-12, 6/27/2008
 

Abstract

In 2007 the total, noncapital, living expenses of 1,232 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $60,294.
 
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Late Planting and Crop Insurance Decisions
Gary Schnitkey
FEFO 08-11, 6/6/2008
 

Abstract

Crop insurance issues related to late planting of crops are addressed in these resources.
 
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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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Good Yields and High Grain Prices Lead to Strong Farm Earnings in 2007
Dale Lattz
FEFO 08-08, 4/18/2008
 

Abstract

Illinois Farm Business Farm Management records indicate that average farm operator returns for labor and management was higher in 2007 than the average income for the previous five years.
 
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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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Impacts of CRC Price Limits on the Value of CRC Relative to RA
Gary Schnitkey
FEFO 08-04, 2/22/2008
 

Abstract

CRC has price limits when calculating crop revenue. In 2008, there is over a 30% chance that harvest prices will exceed CRC limits for corn. Higher chances of exceeding CRC limits increase the value of RA relative to CRC. In corn, RA is worth about $11 than CRC at a 75% coverage level.
 
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The Biotech Yield Endorsement (BYE)
Gary Schnitkey
FEFO 08-03, 1/30/2008
 

Abstract

The Biotech Yield Endorsement (BYE) will allow farmers to received discounts on crop insurance for grain corn grown in Illinois, Indiana, Iowa, and Minnesota. To receive a discount, farmers must plant hybrids containing Monsanto-based triple-stack traits.
 
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After Profitable 2006, Hog Producers Operate at Near Breakeven Levels for 2007, Red Ink Predicted for 2008
Dale Lattz
FEFO 08-02, 1/16/2008
 

Abstract

Lower total returns due to lower market hog prices in 2006 and higher costs resulted in Illinois hog producer profits to decrease by $6.62 per hundredweight produced compared to 2005.
 
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Costs and Returns for Illinois Beef Producers in 2006
Dale Lattz
FEFO 08-01, 1/4/2008
 

Abstract

Total economic costs in 2006 for Illinois beef feeding enterprises exceeded total returns by $16.55 per 100 pounds of beef produced on 8 beef feeding farms. The 2006 returns were the lowest return for any year of the last five years and the lowest since 1998.
 
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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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Costs Exceed Returns for Dairy Producers in 2006, Profit Margins Likely to Turn Positive in 2007
Dale Lattz
FEFO 07-16, 10/22/2007
 

Abstract

Lower milk prices and higher costs resulted in total economic costs exceeding returns in 2006, the first time this has occurred in three years
 
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Are Farmland Prices in Line with Farmland Returns?
Gary Schnitkey
FEFO 07-15, 10/10/2007
 

Abstract

In recent year, farmland prices have increased faster than its capitalized values. This may signal that non-agricultural factors are having more of an impact on farmland prices. Or farmland price increases may need to slow.
 
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Illinois Farm Real Estate Values Continue Double Digit Increases
Dale Lattz
FEFO 07-14, 8/15/2007
 

Abstract

USDA estimated that farmland prices increased by 13.9% between 2006 and 2007, the third year in a row of double digit increases in farmland prices.
 
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Flexible Cash Leases Based on Crop Insurance Parameters
Gary Schnitkey, Dale Lattz
FEFO 07-13, 8/8/2007
 

Abstract

A flexible cash lease is proposed that bases its payments on parameters used in setting revenue guarantees on Group Risk Income Plan (GRIP) crop insurance policies. As structured, this flexible lease causes landlords and farmers to share in commodity price changes that occur between years.
 
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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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Farm and Family Living Income and Expenses for 2006
Dale Lattz
FEFO 07-10, 5/16/2007
 

Abstract

In 2006 the total, noncapital, living expenses of 1,196 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $54,994.
 
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Good Yields and Higher Grain Prices Improve Farm Earnings in 2006
Dale Lattz
FEFO 07-09, 5/2/2007
 

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 2,640 Illinois farms was higher for all geographic areas in the state in 2006 compared to 2005 and above the average for the last five years.
 
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Crop Insurance Decisions Associated with Wheat Failure
Gary Schnitkey
FEFO 07-08, 4/23/2007
 

Abstract

Recent freezes have harmed wheat causing some farmers to consider destroying wheat and planting another crop. For many farmers, planting another crop will have crop insurance implications. This article covers these implication.
 
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Geographical Distribution of Corn and Soybean Planting Intentions
Gary Schnitkey
FEFO 07-07, 4/6/2007
 

Abstract

While corn acreage will increase in the Corn Belt, a higher percentage of corn acres are projected to be grown outside the Corn Belt in 2007. This shift in production could cause a small drag on national corn yields; however, weather and other factors likely will be more important in determining 2007 yields.
 
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Farmland Price Increases Continue: Are They in Line with Farmland Returns?
Gary Schnitkey
FEFO 07-06, 3/30/2007
 

Abstract

Farmland prices in Illinois continue to increase, primarily because ethanol demands have led to higher commodity prices and higher farmland returns. It does not appear that higher farmland prices are out of line with farmland returns in east central Illinois.
 
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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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GRIP in 2007
Gary Schnitkey, and Bruce Sherrick
FEFO 07-04, 2/28/2007
 

Abstract

The structure of GRIP has not changed between 2006 and 2007. In most Illinois counties, GRIP in 2007 will be expected to pay out more in indemnity payments than farmers pay in premiums
 
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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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Higher Prices and Crop Insurance: A Double-Edged Sword
Gary Schnitkey
FEFO 07-02, 1/19/2007
 

Abstract

Premiums for revenue insurance products will be 40% or more higher in 2007 than in 2006. On many farms, it will be possible to insure revenues at levels assuring profits, a situation that occurring rarely when using crop insurance.
 
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Higher Yields and Grain Prices Result in Higher Farm Income Projections for 2006
Dale Lattz, Gary Schnitkey and Paul Ellinger
FEFO 07-01, 1/11/2007
 

Abstract

Net farm incomes were projected for 742 grain farms enrolled in Illinois Farm Business Farm Management (FBFM) Association. Average net farm income in 2006 is projected at $93,600 per farm, up by over 60% from actual farm income of $57,700 in 2005.
 
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Per Acre Machinery Costs and Values on Illinois FBFM Farms, 2005
Gary Schnitkey, Dale Lattz
FEFO 06-23, 12/28/2006
 

Abstract

Power costs on Illinois grain farms averaged $68 per acre in 2005. Farms with lower power costs tended to have higher profits. No difference in power costs existed across tillable acre categories.
 
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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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Profitable 2006 Will Result In Three Consecutive Years Of Profits For Hog Producerse
Dale Lattz
FEFO 06-20, 11/21/2006
 

Abstract

Ower total returns due to lower market hog prices in 2005 and lower ending inventory values resulted in Illinois hog producer profits to decrease by $5.75 per hundredweight produced compared to 2004.
 
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Costs And Returns For Illinois Beef Producers In 2005
Dale Lattz
FEFO 06-19, 11/13/2006
 

Abstract

Total economic costs in 2005 for Illinois beef feeding enterprises exceeded total returns by $5.68 per 100 pounds of beef produced on 11 beef feeding farms. During the last five years, there has been two years where returns were higher than the 2005 returns and two years with lower returns.
 
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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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Returns Exceed Costs For Dairy Producers In 2005, Profit Margins Likely To Turn Negative In 2006
Dale Lattz
FEFO 06-17, 10/20/2006
 

Abstract

Lower feed costs helped offset lower milk prices resulting in total returns exceeding total economic costs for the second year in a row for Illinois dairy producers.
 
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Machinery Cost Estimates for 2006
Gary Schnitkey, Dale Lattz
FEFO 06-16, 09/20/2006
 

Abstract

Estimated per acre machinery costs are estimated to be 11 to 44% higher in 2006 as compared to 2005.
 
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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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Increase in Illinois Land Real Estate Values Accelerates
Dale Lattz
FEFO 06-13, 08/10/2006
 

Abstract

The USDA estimates that Illinois farmland values increased by 14.1% in 2006 to an average of $3,330 per acre. Since 2000, Illinois farm real estate values have increased 68 percent.
 
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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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Farm and Family Living Income and Expense for 2005
Dale Lattz
FEFO 06-10, 06/19/2006
 

Abstract

In 2005 the total, noncapital, living expenses of 1,209 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $52,743.
 
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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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Lower Corn Yields and Higher Input Costs Reduce Farm Earnings in 2005
Dale Lattz
FEFO 06-08, 05/17/2006
 

Abstract

Based on recently summarized Illinois Farm Business Farm Management Association (FBFM) records, average returns for labor and management on 2,940 Illinois farms was lower for all geographic areas in 2005 compared to 2004 and slightly below the average for the last five years.
 
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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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Choice of Revenue Products: Base and Harvest Prices
Gary Schnitkey
FEFO 06-04, 03/06/2006
 

Abstract

Perspective on decisions to take revenue crop insurance products with or without a guarantee increases is provided by evaluating base and harvest prices for corn and soybeans from 1972 through 2005.
 
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GRP and GRIP Payments: Preliminary 2005 Estimates and Historical GRIP Payments
Gary Schnitkey
FEFO 06-03, 02/27/2006
 

Abstract

This publication shows information useful in calculating GRP and GRIP payments in 2005 for all Illinois counties. Also shown are GRIP payments from 1999 through 2005.
 
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Expected Yield Increases and Choice between Group and Farm Crop Insurance
Gary Schnitkey
FEFO 06-02, 02/13/2006
 

Abstract

The Risk Management Agency (RMA) increased the expected yields used to calculate guarantees for Group Risk Plan (GRP) and Group Risk Income Plan (GRIP). Expected yield increases make group products more attractive and may cause some farmers to switch to group products from farm product.
 
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Premium Reduction Plans for Crop Insurance
Gary Schnitkey
FEFO 06-01, 01/23/2006
 

Abstract

The Risk Management Agency (RMA) allows insurance companies to offer Premium Reduction Plans (PRPs) on 2006 crop insurance policies. The amount, if any, of premium reductions will not be known until after 2006. Reductions may not be paid until 2008.
 
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Considerably Lower Farm Incomes Projected for 2005
Dale Lattz, Gary Schnitkey and Paul Ellinger
FEFO 05-24, 12/28/2005
 

Abstract

Net farm incomes were projected for 805 grain farms enrolled in Illinois Farm Business Farm Management (FBFM) Association. Average net farm income in 2005 is projected at $43,600 per farm, down by over 50% from actual farm income of $90,700 in 2004.
 
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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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Profits Should Continue For Hog Producers In 2005 After Profitable 2004
Dale Lattz
FEFO 05-21, 11/14/2005
 

Abstract

Higher total returns due to higher market hog prices in 2004 resulted in Illinois hog producer profits to increase by $14.36 per hundredweight produced compared to 2003.
 
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Costs And Returns For Illinois Beef Products In 2004
Dale Lattz
FEFO 05-20, 10/26/2005
 

Abstract

Total economic costs in 2004 for Illinois beef feeding enterprises exceeded total returns by 55 cents per 100 pounds of beef produced on 11 beef feeding farms.
 
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Dairy Producers Benefit From Record High Milk Prices In 2004, Profits Should Continue In 2005
Dale Lattz
FEFO 05-19, 09/19/2005
 

Abstract

Record high milk prices more than offset increased costs resulting in total returns exceeding total economic costs for Illinois dairy producers in 2004, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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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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Effect of Higher Fuel Prices on Machinery Costs
Dale Lattz, Gary Schnitkey
FEFO 05-17, 09/26/2005
 

Abstract

The price of diesel fuel has increased substantially during the past year with no indication that fuel prices will decline in the near future. This has resulted in increased machinery costs for farmers. The question arises as to how much machinery costs per acre have increased due to the higher fuel costs. This is especially important to those farmers involved in custom farming arrangements. The increase in machinery costs per acre due to the higher fuel prices depends on a number of factors, including the size of equipment, efficiency and type of machinery operation. Fuel costs per acre are estimated for selected machinery operations typically performed in the fall given different prices per gallon for diesel fuel.
 
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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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Increase In Illinois Farm Real Estate Values Continue
Dale Lattz
FEFO 05-15, 08/15/2005
 

Abstract

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state. The estimates are based on surveys of farmers from selected geographical areas. The surveys follow strict statistical guidelines. Estimated values maybe revised the following year based on additional information. Revisions may also be made based on data from the 5-year Census of Agriculture. Values released in 2005 did not include any revisions for previous years. The methodology and timing of the study has changed over time but the statistical information provides some insight as to the changes in farm real estate values from year to year.
 
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Spraying for Pests and Its Impacts on Crop Insurance Coverage
Gary Schnitkey
FEFO 05-14, 07/25/2005
 

Abstract

A number of pests including corn borers, spider mites, and soybean aphids have occurred in many fields in Illinois . Because this year's dry weather have caused significant yield losses in many fields, some farmers question whether to spray for these and other pests. Not spraying may lead to issues with crop insurance coverage.
 
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Insurance Payment Estimates for 2005
Gary Schnitkey
FEFO 05-13, 07/25/2005
 

Abstract

Rains during middle July have reduced dry and droughty conditions over some areas of Illinois . Other areas, however, received little or no rain and crop yields likely are still being reduced. Even areas that received significant rains have had yield reductions due to little rain during May and June.
 
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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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Agricultural Debt Increases But Still Manageable
Gary Schnitkey
FEFO 05-11, 06/10/2005
 

Abstract

Nominal, agricultural debt in Illinois has been increasing since 1991. In this paper, data from the U.S. Department of Agriculture (USDA) and Illinois Farm Business Farm Management (FBFM) are presented to see if increasing debt levels pose problems for the financial health of Illinois farms. While a small number of farms are financially stressed, increasing debt levels do not appear to seriously threaten many farms.
 
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Illinois Historic Crop Yields
2005
 

Abstract

Shows historic crop yields from 1972 to the present
 
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Illinois Average Farm Price Received Database
6/1/2005
 

Abstract

This tool presents average farm price received data, for multiple commodities, in the state of Illinois for the period 1960 to present. These historical price series are often useful for long-range planning. Seven commodities are included in the tool: corn, soybeans, wheat, barrows and gilts, steers and heifers, calves and milk. Monthly average prices and monthly marketing weights are available for corn, soybeans and wheat. Only monthly average prices are available for barrows and gilts, steers and heifers, calves and milk. It is important to note that the prices represent the average price actually received by farmers, and therefore, may be different from average prices offered by the market.
 
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Lease Forms (Cash and Crop Share)
D. Uchtmann, D. Ehrnwald
September, 2001
 

Abstract

These forms can be used to contract between a tenant and landlord.
 
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Leasing Fact Sheets
William R. Harryman
2002
 

Abstract

The following covers basic terms of leases.
 
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Share Rent Characteristics in Illinois
 

Abstract

The following publications shows how landlords and tenants share returns and costs when farmland is share rented. The publications are broken down by region in the state. In northern and central Illinois, share rent leases typically are 50 percent leases in which the landlord and tenant equally share in revenue from the farm. In southern Illinois, share rent leases are more varied with a 2/3 - 1/3 lease being common. Under a 2/3 - 1/3 lease, the tenant receives two-thirds of the revenue from the farmland while the landord receives one-third of the revenue.
 
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Cash Rents in Illinois
 

Abstract

Shows cash rent estimates from Illinois Farm Business Farm Management and a survey conducted by University of Illinois-Extension.
 
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Land Value Index
2004
 

Abstract

The index shows how average farmland values in Illinois have changed over time. The index gives values for the beginning of each year. The latest index value is for January 1, 2004.
 
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Iowa State Publications
 

Abstract

Iowa State University has developed publication that address the following machinery management topics
 
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2005 Iowa Farm Custom Rate Survey
William Edwards,Darnell Smith
2005
 

Abstract

Many Iowa farmers hire some custom machine work intheir farm business, or perform custom work for others. Others rent machinery or perform other services. The information below is based on a survey of 185 Iowa farmers, custom operators, and farm managers. For each operation, the average rate from the survey and the range are shown. Thirty percent of the respondents perform custom work, 20 percent hire work done, and 50 percent indicated doing both.
 
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Indiana Custom Rates 2004
Craig L. Dobbins,Steve Wilson,Zachary Cain
2004
 

Abstract

The rates reported in this publication are based on survey results received in March and April 2004 from farmers throughout Indiana who either hired or performed various custom farming services. The rates shown may differ signifi cantly by local region depending on availability of custom operators and demand for their services. In Indiana, most custom work is done by neighbors after they complete their own work.
 
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2004 Iowa Farm Custom Rate Survey
William Edwards,Darnell Smith
2004
 

Abstract

Many Iowa farmers hire some custom machine work intheir farm business, or perform custom work for others. Others rent machinery or perform other services. The information below is based on a survey of 204 Iowa farmers, custom operators, and farm managers. For each operation, the average rate from the survey and the range are shown. Thirty-three percent of the respondents perform custom work,18 percent hire work done, and 48 percent indicated doing both.
 
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2003 Iowa Farm Custom Rate Survey
William Edwards,Darnell Smith
2003
 

Abstract

Many Iowa farmers hire some custom machine work intheir farm business, or perform custom work for others. Others rent machinery or perform other services. The information below is based on a survey of 217 Iowa farmers, custom operators, and farm managers. For each operation, the average rate from the survey and the range are shown. Twenty-two percent of the respondents perform custom work, 21 percent hire work done, and 56 percent indicated doing both.
 
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2002 Iowa Farm Custom Rate Survey
William Edwards,Darnell Smith,Erica Robertson
2002
 

Abstract

Many Iowa farmers hire some custom machine work intheir farm business, or perform custom work for others. Others rent machinery or perform other services. The information below is based on a survey of 196 Iowa farmers, custom operators, and farm managers. For each operation, the average rate from the survey and the range are shown. Nineteen percent of the respondents perform custom work, 14 percent hire work done, and 42 percent indicated doing both.
 
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2001 Iowa Farm Custom Rate Survey
William Edwards,Darnell Smith,Abe Schwager
2001
 

Abstract

Many Iowa farmers hire some custom machine work intheir farm business, or perform custom work for others. Others rent machinery or perform other services. The information below is based on a survey of 188 Iowa farmers, custom operators, and farm managers. For each operation, the average rate and the range from the survey are shown. Twenty-four percent of the respondents perform custom work, 12 percent hire work done, and 41 percent indicated doing both.
 
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Indiana Custom Rates 2000
D. H. Doster, Ralph Gann, Steve Wilson Steve Wilson,
2000
 

Abstract

The rates reported below are based on responses in November 2000, from 420 farmers throughout Indiana who either hired or performed various custom farming services. In Indiana, most custom work is done by neighbors after they complete their own work. Unless otherwise stated, rates include machine fuel and operator.
 
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MACHINERY COST ESTIMATES: SUMMARY OF OPERATIONS
Gary Schnitkey, Dale Lattz
April 2005
 
No Abstract Available
 
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MACHINERY COST ESTIMATES: FORAGE FIELD OPERATIONS
Gary Schnitkey, Dale Lattz
April 2005
 

Abstract

This publication shows estimated costs for owning and operating machinery for forage operations. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. Estimates include charges for overhead (depreciation, interest, insurance, housing and repairs), fuel, and labor. Not included are allowances for profit. Charging custom rates at estimated costs should cover all costs, but will not generate a profit. Adding 5 to 15 percent to estimated costs may be appropriate for determining custom rates.
 
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MACHINERY COST ESTIMATES: TRACTORS
Gary Schnitkey, Dale Lattz
April 2005
 

Abstract

This publication shows estimated costs for different sized tractors. These estimates are useful for determining machinery costs on farms, rental rates for machinery, and custom rates for machinery
 
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MACHINERY COST ESTIMATES: HARVESTING
Gary Schnitkey, Dale Lattz
April 2005
 

Abstract

This publication show estimated costs for grain harvesting operations. Costs are estimated for combines, grain carts, and grain hauling. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. Estimates include charges for overhead (depreciation, interest, insurance, housing and repairs), fuel and labor. Not included are allowances for profit. Charging custom rates at estimated costs should cover costs, but will not generate profits. Adding 5 to 15 percent to estimated costs is appropriate when determining custom rates. Table 1 shows costs of combining corn and soybeans, operating a grain cart, and hauling grain.
 
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MACHINERY COST ESTIMATES: FIELD OPERATIONS
Gary Schnitkey, Dale Lattz
April 2005
 

Abstract

This publication shows estimated costs of performing agricultural field operations. These estimates are useful for determining custom rates and for analyzing machinery costs on farms. Costs include overhead (depreciation, interest, insurance, housing and repairs), fuel and labor charges. Not included are allowances for profit. Charging custom rates at estimated costs should cover all costs, but will not generate a profit. Adding 5 to 15 percent to estimated costs may be appropriate for determining custom rates. Per acre costs for different field operations are shown in Table 1.
 
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Farm and Family Living Income and Expenditures, 2001 through 2004
Dale H. Lattz
May, 2005
 

Abstract

In 2004 the total, noncapital, living expenses of 1,225 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $52,589--or $4,382 a month for each family (Table 1). This average was 9.2 percent higher than 2003 and 18.2 percent higher than in 2002.Another $5,960 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $58,549 for 2004 compared with $52,908 for 2003, or a $5,641 increase per family. The average amount spent per family for capital items was $1,211 more, while noncapital expenses increased $4,430 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.
 
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Costs to Produce Corn and Soybeans in Illinois—2005
Dale H. Lattz
May, 2006
 

Abstract

In 2004 the total of all economic costs peracre 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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Costs to Produce Hogs in IllinoisC2003
Dale H. Lattz
August, 2004
 

Abstract

Higher total returns in 2003 resulted in Illinoishog producer profits to increase by $4.79 per hundredweight produced compared to 2002. Total returns in 2003 averaged $38.15 per hundredweight produced compared to $32.25 in 2002. Total production costs for the farrowto- finish hog enterprises exceeded total returns by 78 cents per hundredweight produced in 2003. Feed costs increased by $2.11 per hundredweight produced while nonfeed costs decreased by $1.00 per hundredweight. The 2002 return was a negative $5.56. For the five-year period, 1999 through 2003, total returns exceeded production costs by $1.01 per hundredweight. Three of the past five years show a positive return for farrow-to-finish enterprises.
 
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Costs to Produce Milk—2003 in Illinois — 2003
Dale H. Lattz
August, 2004
 

Abstract

While there was some improvement in milkprices, total economic costs still exceeded total returns for Illinois dairy producers in 2003, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association. The average net price received per 100 pounds of milk was $12.51 which was less than total costs of $13.92. The average price received for milk in 2002 was $12.22. On a per cow basis, total returns from milk were $2,421 compared to the total cost to produce milk of $2,696 per cow. Total costs have exceeded total returns in three of the last five years.
 
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Costs to Produce Beef in Illinois—2003
Dale H. Lattz
August, 2004
 

Abstract

Total returns in 2003 for Illinois beeffeeding enterprises exceeded total economic costs by $20.87 per 100 pounds of beef produced on 11 beef feeding farms (see Table 1). This was by far the highest profit margin for these farms since this study began in 1980. Total costs exceeded returns by $7.97 per 100 pounds produced in 2002. Total returns have exceeded total economic costs in only five years since 1980, when this study began. Those years were 2003, 1999, 1992, 1990, and 1987. The 2003 level of returns was $26.27 per 100 pounds beef produced above the average returns for the 1994 through 2003 time period. Figure 1 illustrates average returns, cash operating costs and total costs for the 1994 through 2003 time period.
 
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Farm Income and Production Costs for 2003
Dale H. Lattz,Dwight D. Raab,Charles E. Cagley
April, 2004
 

Abstract

Average farm operator returns for labor andmanagement on 3,018 Illinois farms was higher for all geographic areas in the state and increased considerably in 2003 compared to returns experienced by producers in 2002. The average return to the operator's labor and management income in 2003 was $55,678. The 2003 returns were $42,702 above the 2002 average of $12,976 and $28,229 above the average for the last five years. Although the 2003 earnings figure is a substantial improvement when compared to the last few years, the 1999 through 2003 five year average is a modest $27,449. A reasonable charge for the farm operator=s debt-free capital investedin machinery, equipment, land, and inventory averaged $14,962. Combining this amount with the return to the operator=s labor andmanagement resulted in average operator net farm income of $70,640. Record breaking corn yields along with higher grain prices offset below average soybean yields. Improved livestock returns also contributed to the better incomes on farms producing livestock. A change in the method of calculating depreciation also affected the earnings figure. As a result of the higher grain prices, for the second year in a row government farm program payments were at levels considerably below farm program payments made during the 1998 through 2001 time period. Farm earnings were highest in the central and far southern areas of the state. Earnings were modestly lower as you moved farther north.
 
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Hog Production Costs and Profits by Quarters Per 100 Pounds Produced
University of Illinois Farm Business Management Farm Business Management
 
No Abstract Available
 
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Actual and Projected Revenue Less Variable Costs for Soybean, Southern Illinois, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Soybean, Central Illinois, Low Productivity Farmland, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Soybean, Central Illinois, High Productivity Farmland, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Soybeans, Northern Illinois, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Corn, Southern Illinois, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Corn, Central Illinois, Low Productivity Farmland, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Corn, Central Illinois, High Productivity Farmland, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Actual and Projected Revenue Less Variable Costs for Corn, Northern Illinois, 2000 through 2005
April, 2005
 

Abstract

Tables show revenue and variable costs for farms enrolled in Illinois FBFM. Per acre results are given for three areas of the state: Northern, Central, and Southern Illinois. Central Illinois if further divided by land productivity. High productivity soils averaged 159 bu./acre of corn over the last 5 years. Low productivity soils averaged 142 bu./acre. Figures for years prior to 2003 are actual results. Years after 2003 are forecast.
 
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Illinois Crop Budgets
February, 2004
 

Abstract

Budgets show projected costs. Inputs for seed, fertilizer, and chemicals are based on agronomic recommendations for the respective yield level. Other costs are based on historical records from Illinois FBFM. Budgets reflect full costs, whether those costs are cash or opportunity costs. Opportunity costs within the budgets are: 1) interest on operating inputs, 2) labor, and 3) interest on investment.
 
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Farm And Family Living Income And Expenses For 2004
Dale Lattz
FEFO 05-10, 05/26/2005
 

Abstract

In 2004 the total, noncapital, living expenses of 1,225 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $52,589--or $4,382 a month for each family (Table 1). This average was 9.2 percent higher than 2003 and 18.2 percent higher than in 2002. Another $5,960 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $58,549 for 2004 compared with $52,908 for 2003, or a $5,641 increase per family. The average amount spent per family for capital items was $1,211 more, while noncapital expenses increased $4,430 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.
 
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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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Machinery Cost Estimates in 2005
Gary Schnitkey, Dale Lattz
FEFO 05-08, 04/19/2005
 

Abstract

Periodically, personnel within the Department of Agricultural and Consumer Economics estimate the costs of completing field, forage, and harvesting operations on Illinois farms. Per hour costs of operating tractors also are available. Estimates were updated in April 2005 and are available in the management section of farmdoc (http://www.farmdoc.uiuc.edu/manage/machinebuilding_index.html).
 
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Record Yields Boost 2004 Farm Earnings
Dale Lattz
FEFO 05-07, 04/14/2005
 

Abstract

Based on Illinois Farm Business Farm Management Association (FBFM) records that have been recently summarized, a verage farm operator returns for labor and management on 3,015 Illinois farms was higher for all geographic areas in the state in 2004 compared to 2003 and significantly above the average for the last five years. Record breaking corn and soybean yields and strong grain prices early in the year more than offset increased costs. Relatively high livestock prices also contributed to the better incomes on livestock farms. Lower grain prices at harvest resulted in the opportunity for producers to receive loan deficiency payments on corn and for part of the time on soybeans. Thus, total government payments received in 2004 by producers were above payments received in 2002 and 2003. Farm earnings were highest in the west central and far southern areas of the state. Earnings were lowest in the northeastern part of the state.
 
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Soybean Rust Considerations in Share-rent Arrangements and in Crop Insurance
Gary Schnitkey
FEFO 05-06, 03/28/2005
 

Abstract

Some individuals have questioned how fungicide costs should be shared under crop-share arrangements. In addition, significant discussion has ensued concerning crop insurance coverage for rust-induced losses. These issues are covered in the following sections.
 
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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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Crop Insurance Decisions in 2005
Gary Schnitkey
FEFO 05-04, 02/28/2005
 

Abstract

Farmers and share-rent landlords have until March 15th to make changes to their crop insurance programs. This article provides an update for making 2005 decisions. Three topics are covered: 1) changes in crop insurance programs in 2005, 2) group product update, and 3) crop insurance considerations given the possibility on soybean rust.
 
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Group Risk Income Plans Likely to Pay in Many Counties for 2004 Crops
Gary Schnitkey
FEFO 05-03, 02/02/2005
 

Abstract

Some people have asked whether group products will make payments for the 2004 cropping year. Group products base insurance payments on county yields calculated by the National Agricultural Statistical Service (NASS), an agency of the U.S. Department of Agriculture. NASS will not release 2004 county yields until March or April of 2005. Hence, payments from group products will not be known until March or April.
 
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Lower Grain Prices Result in Increased Loan Deficiency Payment Activity for the 2004 Corn and Soybean Crop
Dale Lattz, Gary Schnitkey
FEFO 05-02, 01/31/2005
 

Abstract

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 are below the commodity loan rate, producers can receive the difference through either a market loan gain or an LDP. Current loan rates in Illinois for corn, soybeans and wheat average about $2.02, $5.14 and $2.54 respectively. These rates vary by county.
 
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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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2004 Crop Insurance Changes And Historical Crop Insurance Use
Gary Schnitkey
FEFO 04-18, 11/01/2004
 

Abstract

Use of federally-subsidized, multi-peril crop insurance products in 2004 is described in this paper. In addition, changes in crop insurance use from 1990 through 2004 are presented. This information allows farmers to compare their crop insurance programs to Illinois averages.
 
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Returns Improve Marginally For Dairy Producers In 2003, Profits Should Return In 2004
Dale Lattz
FEFO 04-17, 09/22/2004
 

Abstract

While there was some improvement in milk prices, total economic costs still exceeded total returns for Illinois dairy producers in 2003, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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Costs And Returns For Illinois Beef Producers In 2003
Dale Lattz
FEFO 04-16, 09/14/2004
 

Abstract

Total returns in 2003 for Illinois beef feeding enterprises exceeded total economic costs by $20.87 per 100 pounds of beef produced on 11 beef feeding farms. This was by far the highest profit margin for these farms since this study began in 1980. Total costs exceeded returns by $7.97 per 100 pounds produced in 2002. Total returns have exceeded total economic costs in only five years since 1980, when this study began. Those years were 2003, 1999, 1992, 1990, and 1987. The 2003 level of returns was $26.27 per 100 pounds beef produced above the average returns for the 1994 through 2003 time period. Figure 1 illustrates average returns, cash operating costs and total costs for the 1994 through 2003 time period.
 
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Hog Producers Should Experience A Profitable Year In 2004 After Breakeven Situation In 2003
Dale Lattz
FEFO 04-15, 09/02/2004
 

Abstract

While showing improvement in the bottom line, total economic costs were still slightly higher than total returns for hog producers in 2003. Higher market hog prices during the last three quarters of the year were the main reason for the improved profit margins. Feed costs increased in 2003 resulting in higher total costs compared to the year before. Higher market hog prices during the first half of 2004 along with projections for good prices during the second half of the year and lower feed costs should result in a profitable year for hog producers in 2004.
 
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Grain Delivery Comparison Model: Release Of A New FAST Tool
Gary Schnitkey
FEFO 04-14, 08/26/2004
 

Abstract

A new Farm Analysis Solution Tool (FAST) has been released for use. This Microsoft Excel spreadsheet is called the Grain Delivery Comparison Model and is useful for comparing net revenues associated with delivering grain up to three different locations. This tool has been developed by Brian Pulley (Illinois Farm Business Farm Management) and myself and can be downloaded from the FAST section of farmdoc (www.farmdoc.uiuc.edu).
 
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An Updated Look At Illinois Farm Real Estate Values
Dale Lattz
FEFO 04-13, 08/18/2004
 

Abstract

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state. The estimates are based on surveys of farmers from selected geographical areas. The surveys follow strict statistical guidelines. Estimated values maybe revised the following year based on additional information. Revisions may also be made based on data from the 5-year Census of Agriculture. Values released in 2004 included downward revisions for the 1999 through 2003 time period based on the 2002 Census of Agriculture data. The methodology and timing of the study has changed over time but the statistical information provides some insight as to the changes in farm real estate values from year to year.
 
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Projected 2005 Commodity Prices Suggest Caution In Farm Rental Bidding
Gary Schnitkey
FEFO 04-12, 08/15/2004
 

Abstract

Many observers believe that cash rents for the 2005 cropping year will rise above 2004 levels because average cash rents have been increasing in northern and central Illinois for the past several years. Moreover, higher commodity prices during late 2003 and the first half of 2004 led to projections of higher agricultural profitability and were anticipated to further increase cash rent bids.
 
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Per Acre Machinery Costs And Values On Illinois Farms, 2003
Gary Schnitkey
FEFO 04-11, 07/28/2004
 

Abstract

Summaries of Illinois Farm Business Farm Management (FBFM) records indicate that power costs on Illinois grain farms average $59.39 per tillable acre in 2003. Power costs are composed of utilities ($4.85), repairs ($15.73), machine hire and leases ($8.53), fuel and oil ($9.65), light vehicle ($2.19) and depreciation ($18.44).
 
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Farmland Prices, Net Rents And Interest Rates Since 1970
Gary Schnitkey
FEFO 04-10, 06/11/2004
 

Abstract

Farmland prices in central Illinois have increased about 6% per year since the late 1980s. In this article, we examine whether increases in net returns or decreases in interest rates since the late 1980s provide the economic basis for increasing farmland prices. This analysis may shed light on the future direction of farmland prices.
 
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Illinois Farm Incomes Higher in 2003
Dale Lattz
FEFO 04-09, 05/18/2004
 

Abstract

Average farm operator returns for labor and management on 3,018 Illinois farms was higher for all geographic areas in the state and increased considerably in 2003 compared to returns experienced by producers in 2002. Record breaking corn yields along with higher grain prices offset below average soybean yields. Improved livestock returns also contributed to the better incomes on farms producing livestock. A change in the method of calculating depreciation also affected the earnings figure. As a result of the higher grain prices, for the second year in a row government farm program payments were at levels considerably below farm program payments made during the 1998 through 2001 time period.
 
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Farm and Family Living Income and Expenses for 2003
Dale Lattz
FEFO 04-08, 04/30/2004
 

Abstract

In 2003 the total, noncapital, living expenses of 1,102 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $48,159--or $4,013 a month for each family (Table 1). This average was 8.3 percent higher than 2002 and 11.4 percent higher than in 2001. Another $4,749 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $52,908 for 2003 compared with $48,855 for 2002, or a $4,053 increase per family. The average amount spent per family for capital items was $369 more, while noncapital expenses increased $3,684 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.
 
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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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Skip-Row Planter Costs
Gary Schnitkey
FEFO 04-06, 03/31/2004
 

Abstract

Skip-row planters, which allow corn to be planted in 30-inch rows and soybeans to be planted in 15-inch rows, have become relatively popular in Illinois within the last several years. In this article, additional costs associated with skip-row planters are examined. Specifically, additional costs associated with skip-row planters are stated on a per acre basis for each acre planted to soybeans. Costs are examined for 12-row and 16-row planters on farm sizes ranging from 1,000 acres up to 1,800 acres. Results indicate that skip-row planters add between $3.62 and $7.90 per acre for each acre of soybeans planted.
 
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Planter Costs For Alternative Farm Sizes
Gary Schnitkey
FEFO 04-05, 03/31/2004
 

Abstract

This article reports on a study of planter costs for different farm sizes. Our objective was to determine the planter size that had the lowest cost for a given farm size. Farm sizes from 400 to 4,000 acres in 400 acre increments were evaluated. Planter sizes ranged from 6-rows up to 36-rows. Planters were assumed to plant all acres with acres evenly split between corn and soybeans.
 
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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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Insurance Premium Higher In 2004
Gary Schnitkey
FEFO 04-03, 02/19/2004
 

Abstract

Premiums for most crop insurance products will be higher in 2004 compared to 2003. Some premiums will increase by over 50%.
 
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Grip-Hr: An Analysis Of Returns And Risks
Gary Schnitkey
FEFO 04-02, 02/11/2004
 

Abstract

Group Risk Income Plan (GRIP) is a revenue insurance that insures county revenue. In 2004, a harvest revenue option was added to GRIP. At the county level, GRIP with the harvest revenue option (GRIP-HR) is conceptually similar to farm-level products that have guarantee increase provisions (i.e., Crop Revenue Coverage (CRC) or Revenue Assurance (RA) with a harvest revenue option). How GRIP-HR works is described in a previous Illinois Farm Economics: Facts and Opinions entitled "Group Crop Insurance Plans". This previous article also details the working of the other two group products (Group Risk Plan (GRP) and Group Risk Income Plan without the Harvest Revenue option (GRIP-NoHR)). The purpose of this Facts and Opinions article is to quantify the returns and risks associated with GRIP-HR.
 
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Group Crop Insurance Plans
Gary Schnitkey
FEFO 04-01, 01/26/2004
 

Abstract

A new group crop insurance product was introduced in 2004, bringing the total number of group products to three. These three are:
 
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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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Costs and Returns for Illinois Beef Producers in 2002
Dale Lattz
FEFO 03-17, 09/08/2003
 

Abstract

Total economic costs in 2002 for Illinois beef feeding enterprises exceeded total returns by $7.97 per 100 pounds of beef produced on 10 beef feeding farms. Total costs exceeded returns by $8.48 per 100 pounds produced in 2001. Total returns have exceeded total economic costs in only four years since 1980, when this study began. Those years were 1999, 1992, 1990, and 1987. The 2002 level of returns was 22 cents per 100 pounds beef produced above the average returns for the period 1993 through 2002. Figure 1 illustrates average returns, cash operating costs and total costs for the 1993 through 2002 time period.
 
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Recognizing Income and Budgeting for Counter Cyclical Payments
Gary Schnitkey, Dale Lattz
FEFO 03-16, 08/29/2003
 

Abstract

The counter cyclical (CC) program authorized under the 2002 Farm Bill can make payments for a program year across two calendar years. For example, payments for the 2003 program year can occur in 2003 and 2004. Many farmers prepare financial statements at the end of the year. At year-end 2003, income from the 2003 program year that will be received in 2004 should be recognized on the 2003 income statement, thereby causing a matching of revenue to expenses. At year-end 2003, however, the amount of CC payments that will occur in 2004 will not be known. Not knowing the amount of future CC payments presents difficult in 1) determining how much revenue to recognize on the 2003 income statement and 2) determining the amount of CC payments to include on 2004 cash flow budgets. This newsletter addresses these two issues. Before discussing these issues, the mechanics and timing of CC payments are described because they have direct impacts on revenue recognition and cash flow budgeting.
 
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A Historic Look at Illinois Farm Real Estate Values
Dale Lattz
FEFO 03-15, 08/27/2003
 

Abstract

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state. The estimates are based on surveys of farmers from selected geographical areas. The surveys follow strict statistical guidelines. Estimated values maybe revised the following year based on additional information. Revisions may also be made based on data from the 5-year Census of Agriculture. The methodology and timing of the study has changed over time but the statistical information provides some insight as to the changes in farm real estate values from year to year.
 
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Dairy Profits in 2002
Dale Lattz
FEFO 03-14, 07/31/2003
 

Abstract

Significantly lower milk prices resulted in total economic costs exceeding total returns for Illinois dairy producers in 2002, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association (FBFM).
 
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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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Hog Profits in 2002 and 2003
Dale Lattz
FEFO 03-12, 06/30/2003
 

Abstract

After three profitable years, total economic costs exceeded total returns for hog producers in 2002. Lower market hog prices, especially during the last three quarters of the year, were the main factor for the negative profit margin. Feed costs did increase some in 2002 but were still at relatively low levels. Projections for decreased pork production resulting in higher hog prices along with lower feed costs during the second half of the year could result in a narrow but positive profit margin for producers in 2003.
 
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New Machinery Cost Estimates and Planting Costs
Gary Schnitkey
FEFO 03-11, 06/27/2003
 

Abstract

New machinery cost estimates were released on farmdoc in June 2003. These cost estimates are calculated using an economic-engineering approach based on buying new equipment and holding all machines, except combines, for ten years (combines are held for seven years). Estimates for tractor, field, planting, forage, and combining operations are in the management section of farmdoc (click here). In addition, online Machinery Costs Tools are available that allow users to change input so that costs more closely reflect operations on a particular farm.
 
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Size Economies on Grain Farms
Gary Schnitkey, Dale Lattz
FEFO 03-10, 05/30/2003
 

Abstract

An often-asked question is whether larger grain farms have lower per acre costs than smaller grain farms. In this paper, data from the Illinois Farm Business Farm Management (FBFM) Association are used to address this question. We find that per acre costs for farm sizes in size categories less than 800 to 1,200 acres are higher than for larger farm size categories. Total costs are relatively constant across categories for categories above 1,200 acres.
 
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Farm and Family Living Expenses for 2002
Dale Lattz
FEFO 03-09, 05/07/2003
 

Abstract

In 2002 the total, noncapital, living expenses of 1,216 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $44,475--or $3,706 a month for each family (Table 1). This average was 2.9 percent higher than 2001 and 4.5 percent higher than in 2000. Another $4,380 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $48,855 for 2002 compared with $48,097 for 2001, or a $758 increase per family. The average amount spent per family for capital items was $505 less, while noncapital expenses increased $1,263 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.
 
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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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Farm Incomes Vary Considerably Across Illinois in 2002
Dale Lattz
FEFO 03-07, 04/08/2003
 

Abstract

Average farm operator returns for labor and management on 3,165 Illinois farms varied considerably between geographic areas and decreased slightly in 2002 compared to returns experienced by producers in 2001. Higher grain prices and slightly lower costs did not offset lower corn yields and less government payments. Lower livestock returns also contributed to lower incomes on farms producing livestock. Changes in the government farm program and higher grain prices sharply reduced the amount of government farm program payments producers received in 2002.
 
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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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Analyzing the Profitability of Your Farm Business
Dale Lattz
FEFO 03-03, 02/17/2003
 

Abstract

Now is a good time for farm operators to take a good look at the financial performance of their farm business for 2002. Most farm operators use a calendar year (January 1 - December 31) as their business year for income tax purposes and also to prepare financial statements about their operation. Even if a business is on a different fiscal year for tax reporting purposes, they may still want to prepare financial statements based on a calendar year.
 
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Revenue Guarantees on Crop Insurance Products
Gary Schnitkey
FEFO 03-02, 01/31/2003
 

Abstract

Revenue Assurance (RA), Crop Revenue Coverage (CRC), and Income Protection (IP) are multi-peril crop insurances that provide revenue guarantees. When indemnified revenue falls below the revenue guarantee, these revenue products make payments equal to revenue guarantee minus indemnified revenue. Payments bring revenue back up to the level of the revenue guarantee.
 
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Cash Rent Worksheet
Dale Lattz, Gary Schnitkey
FEFO 03-01, 01/27/2003
 

Abstract

A new cash rent worksheet designed to help farmers determine the amount of cash rent that can be paid for an acre of land is available on farmdoc (Click here to download sheet). A user must have Microsoft Excel version 97 or higher to operate the worksheet.
 
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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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Cash Rents and Equivalent Cash Rents in Illinois
Dale Lattz, Gary Schnitkey
FEFO 02-23, 12/23/2002
 

Abstract

Most Illinois farmers rent the majority of their farmland. Alternative sources suggest that in Illinois somewhere between 60 to 80 percent of the land that is farmed is rented. This Illinois Farm Economics: Facts and Opinions reviews payments that farmers make to landlords for rented farmland. This information can aid farmers and landowners as they review their leasing arrangements.
 
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Lower, Highly Variable Incomes Projected for 2002
Dale Lattz, Gary Schnitkey, Paul Ellinger
FEFO 02-22, 11/27/2002
 

Abstract

The November, 2002 Illinois Agricultural Statistical Service (IASS) yield estimates for Illinois (see http://www.agstats.state.il.us/releases/crop.htm) indicated state average corn, soybean and wheat yields will be lower for 2002 compared to 2001. However, yields varied considerably between the different Crop Reporting Districts (CRD) in the state. These yields, a $2.40 corn price, a $5.60 soybean price, significantly lower government farm program payments and slight adjustments in operating expenses are used to project 2002 net farm incomes for 993 Illinois grain farms. The farms used in the study come from a sample of grain farms enrolled in the Illinois Farm Business Farm Management (FBFM) Association.
 
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Farmland Leasing Update
Gary Schnitkey
FEFO 02-21, 11/20/2002
 

Abstract

The University of Illinois - Extension conducted a leasing survey in 2002 in which farmers and landowners were asked to describe their share rent and cash rent leases. This Farm Economics: Facts and Opinions summarizes findings from this survey and is divided into three sections: 1. Land tenure in Illinois, 2. Cash rents in Illinois, and 3. Share rent characteristics in Illinois.
 
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Costs and Returns for Beef Producers, 2001
Dale Lattz
FEFO 02-20, 10/31/2002
 

Abstract

Total economic costs in 2001 for Illinois beef feeding enterprises exceeded total returns by $8.48 per 100 pounds of beef produced on 8 beef feeding farms. Total costs exceeded returns by $5.55 per 100 pounds produced in 2000. Total returns have exceeded total economic costs in only four years since 1980, when this study began. Those years were 1999, 1992, 1990, and 1987. The 2001 level of returns was $1.48 per 100 pounds beef produced below the average returns for the period 1992 through 2001. Figure 1 illustrates average returns, cash operating costs and total costs for the 1992 through 2001 time period.
 
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Profitable Year for Dairy Producers in 2001
Dale Lattz
FEFO 02-19, 10/18/2002
 

Abstract

Significantly higher milk prices resulted in total returns exceeding total economic costs for Illinois dairy producers in 2001, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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Cash Flows Tight on Many Grain Farms Because of Reduced Government Payments
Dale Lattz
FEFO 02-18, 09/30/2002
 

Abstract

After four years of low grain prices, this summer's price upswing has been welcomed by producers. However, higher prices may not completely offset lower revenue caused by lower yields as a result of adverse weather conditions. In addition, higher grain prices will reduce the amount of farm program payments. There will be little, if any, loan deficiency and counter cyclical payments this fall. In addition, the new farm bill does not contain provisions for market loss assistance and oilseed payments that have been paid out the past few years. These payments came about due to additional legislative action in response to low market prices.
 
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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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Options for Determining Base Acres Under the 2002 Farm Bill
Gary Schnitkey
FEFO 02-16, 08/30/2002
 

Abstract

Between October 1, 2002 and April 1, 2003, farmers and landowners will choose one of five options for determining base acres under the 2002 Farm Bill. This choice influences direct and counter-cyclical (CC) payments that will be received for crops grown in 2002 through 2007. The decision also will impact whether the yields used to calculate CC payments can be partially updated (see Updating Acres and Yields Under the 2002 Farm Bill at http://www.farmdoc.uiuc.edu/manage/newsletters/html/fefo02_11.html for further descriptions). The five options are: 1. Retain 2002 Production Flexibility Contract (PFC) acres, 2. Retain 2002 PFC acres and add minimum eligible oilseed acres, 3. Exchange 2002 PFC acres for maximum oilseed acres, 4. Update acres using the average of acres planted or prevented planting from 1998 through 2001, and 5. Exchange existing 2002 PFC acres with less than maximum or more than minimum oilseed acres.
 
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Hog Production Profitable in 2001, Red Ink on the Way
Dale Lattz
FEFO 02-15, 08/06/2002
 

Abstract

For the third year in a row, total returns exceeded total costs for hog producers in 2001. Good market hog prices, especially during the second and third quarter, and continual low feed costs were the main factors for the positive profit margins. However, increased pork production, sluggish demand and increasing feed costs will result in negative profit margins for producers in 2002.
 
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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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2002 Farm Bill Payment Limitations
Dale Lattz, Gary Schnitkey
FEFO 02-13, 07/17/2002
 

Abstract

The Farm Security and Rural Investment Act of 2002 contain provisions limiting the amount of payments a "person" can receive per program year. These limits are $40,000 for direct payments, $65,000 for counter-cyclical payments and $75,000 for loan deficiency payments (LDP's) and marketing loan gains. Farm sizes that cause payments to exceed these limits are illustrated in the following sections. Then, a definition of a "person" is given. This definition along with other entity rules comes directly from the Farm Service Agency (FSA) Fact Sheet "Payment Eligibility and Limitations" (see http://www.fsa.usda.gov/pas/publications/facts/html/payelig01.htm).
 
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Farm Program Payment Comparisons under the 1996 and 2002 Farm Bill
Dale Lattz, Gary Schnitkey
FEFO 02-12, 06/14/2002
 

Abstract

Considerable discussion has arose concerning the level of government expenditures estimated under the recently passed Farm Security and Rural Investment Act of 2002, hereafter referred to as the 2002 Farm Bill, as compared to the 1996 Federal Agriculture Improvement and Reform Act (FAIR), the 1996 Farm Bill. Popular press articles have indicated as much as a seventy percent increase in government payments under the new bill. Generally, these comparisons have not taken in consideration the additional marketing loss assistance payments that have been paid since 1998. This paper looks at provisions contained in the Commodity Title of the new Farm Bill and estimates payments for representative Illinois grain farms for 2001 under the 1996 Farm Bill and the 2002 Farm Bill. Caution must be taken in reviewing the results as these estimates are based on a current understanding of provisions of the new Bill. Final regulations have not been released.
 
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Brief Highlights of the 2002 Farm Bill
Bob Hauser
FEFO 02-11, 06/07/2002
 

Abstract

The 2002 Farm Bill, representing a collection of compromises between the House and Senate Bills, became law on May 13, 2002. It is a six-year bill entitled "Farm Security and Rural Investment Act of 2002."
 
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Updating Acres and Yields Under the 2002 Farm Bill
Gary Schnitkey, Dale Lattz
FEFO 02-10, 06/05/2002
 

Abstract

The Farm Security and Rural Investment Act of 2002, hereafter referred to as the 2002 Farm Bill, includes provisions authorizing direct and counter-cyclical payments for 2002 through 2007 crops. These payments will be determined using base acres and program yields. Farmers and landowners have one-time decisions to make concerning these acres and yields. They either can "update" acres to reflect acres from 1998 through 2001 or they can "not update" and have acres based on those used to calculate Agricultural Marketing Transition Act (AMTA) payments. If base acres are updated, farmers also can update yields used to determine counter-cyclical payments.
 
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Farm and Family Living Income and Expenses for 2001
Dale Lattz
FEFO 02-09, 05/02/2002
 

Abstract

In 2001 the total, noncapital, living expenses of 1,175 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $43,212--or $3,601 a month for each family (Table 1). This average was 1.6 percent higher than 2000 and 5.8 percent higher than in 1999. Another $4,885 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $48,097 for 2001 compared with $47,526 for 2000, or a $571 increase per family. The average amount spent per family for capital items was $97 less, while noncapital expenses increased $668 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.
 
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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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Study Show Drop In 2001 Farm Incomes
Dale Lattz
FEFO 02-06, 03/27/2002
 

Abstract

Average farm operator returns for labor and management on 3,072 Illinois farms decreased significantly in 2001 compared to returns experienced by producers in 2000. The 2001 returns were the lowest since 1998 and the second lowest since 1991. Incomes declined despite good corn and soybean yields recorded by producers across most of the state. Lower soybean prices and higher costs were the major reasons for the decline in incomes. For the most part, livestock returns were good, which helped support incomes on farms producing livestock. Although lower rates paid for government Production Flexibility Contract and Market Loss Assistance payments contributed to the lower incomes, government farm program payments continue to be an important factor in supporting farm incomes.
 
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2002 IFARM Insurance Evaluator
Gary Schnitkey
FEFO 02-05, 03/11/2002
 

Abstract

The 2002 version of the iFARM Crop Insurance Evaluator is available for use on farmdoc. The Evaluator shows risks and returns from five different crop insurance products: Actual Production History (APH), Revenue Assurance with the Base Price option (RA-BP), Crop Revenue Coverage (CRC), Group Risk Plan (GRP), and Group Risk Income Plan (GRIP) insurance.
 
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2002 Crop Insurance Decisions
Gary Schnitkey
FEFO 02-04, 02/22/2002
 

Abstract

Multi-peril products available for insuring crops in Illinois during 2002 have not changed from 2001. Moreover, subsidy levels have not changed, causing 2002 premiums to be roughly similar to 2001 premiums. Hence, the criteria for choosing between crop insurance products have not changed between 2002 and 2001. Choices or multi-peril insurance products can be divided into four categories.
 
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2002 IFARM Premium Calculator
Gary Schnitkey
FEFO 02-03, 02/08/2002
 

Abstract

The 2002 version of the IFARM premium calculator has been released for use. This tool calculates per acre insurance premiums for the following insurances: Actual Production History (APH), Revenue Assurance with the base price option (RA-BP), Crop Revenue Coverage (CRC), Group Risk Plan (GRP), and Group Risk Income Plan (GRIP). Premiums can be calculated for corn, soybeans, wheat, and grain sorghum in counties of twelve states located in the greater Corn Belt. The Premium Calculator is in the crop insurance section of farmdoc (http://www.farmdoc.uiuc.edu/cropins/).
 
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Analyzing Your Farm Business
Dale Lattz
FEFO 02-02, 01/31/2002
 

Abstract

This time of year farm operators spend time in their office completing paperwork for income taxes, preparing information for their lenders and hopefully spending some time analyzing the performance of their business during the past year. Most farm operators use a calendar year (January 1 - December 31) as their business year for income tax purposes and also to prepare financial statements about their operation. Even if a business is on a different fiscal year for tax reporting purposes, they may still want to prepare financial statements based on a calendar year.
 
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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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New Spreadsheet Tool for Machinery Economics
Dale Lattz
FEFO 01-25, 12/17/2001
 

Abstract

A new Microsoft Excel spreadsheet has been developed to provide economic information on machinery issues commonly faced by farmers. The spreadsheet will 1) calculate the probabilities of being able to complete machinery operations between beginning and ending dates, 2) calculate the costs of tillage and planting operations, and 3) calculate the cost of combining. The spreadsheet is named Machinery Economics and is part of the FAST decision aids available for download at farmdoc (see http://www.farmdoc.uiuc.edu/finance/business.html).
 
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Landlord Returns from Illinois Farmland
Dale Lattz
FEFO 01-24, 12/06/2001
 

Abstract

Farmland returns are conceptually similar to stock returns. For a stock there may be a cash return, or dividend, and there may be appreciation in the stock's value. Similarly, farmland has a cash return to the landowner in the form of a net return from leasing the land. Farmland also may increase in value. However, like a stock investment, farmland values also can decline. This paper examines historic cash returns, or net returns, to landlords leasing Illinois farmland using typical crop share leases.
 
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Corn As A Non-Ethanol Fuel Source
Mr. Doug Carolus
FEFO 01-23, 11/29/2001
 

Abstract

As a result of recent low corn prices, there has been interest in the use of corn as a heating fuel. Corn burning stoves and furnaces have been available for many years. Current technology has improved the efficiency of corn burning; hence, corn burners are becoming more economical. Corn burning stoves and furnaces feed corn from a holding bin into a firepot where the corn is burned and a small electric fan provides air for combustion. In general, corn-burning stoves heat one room. Corn burning furnaces have the ability to heat an entire house by using a heat exchange system somewhat similar to gas furnaces.
 
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Benchmark Machinery Values on Grain Farms
Gary Schnitkey
FEFO 01-22, 11/12/2001
 

Abstract

Machinery costs represent a significant proportion of total costs on grain farms. Machinery depreciation, machinery repairs, fuel, machinery hire and leasing, utilities, and light vehicle expense account for an average of 16 percent of the total economic costs on grain farms enrolled in the Illinois Farm Business Farm Management (FBFM) Association. There also is considerable variability in machinery costs across farms, with more profitable farms tending to have lower per acre machinery costs (see Illinois Farm Economics: Facts and Opinions. "Do Some Farms Consistently Have Higher Profits than Other Farms?" FEFO 01-15, July 20, 2001).
 
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Costs and Returns for Illinois Beef Production in 2000
Dale Lattz
FEFO 01-21, 10/19/2001
 

Abstract

Total economic costs in 2000 for Illinois beef feeding enterprises exceeded total returns by $5.55 per 100 pounds of beef produced on 13 beef feeding farms. Total returns exceeded costs by $6.95 per 100 pounds produced in 1999. Total returns have exceeded total economic costs in only four years since 1980, when this study began. Those years were 1999, 1992, 1990, and 1987. The 2000 level of returns was $2.52 per 100 pounds beef produced above the average returns for the period 1991 through 2000. Figure 1 illustrates average returns, cash operating costs and total costs for the 1991 through 2000 time period.
 
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Perspectives on Farmland Leasing
Dale Lattz
FEFO 01-20, 10/09/2001
 

Abstract

Alternative sources suggest that Illinois farmers own somewhere between 20 to 40 percent of the land they farm. Therefore, Illinois farmers rent the majority of land they farm. They rent this farmland from retired farmers, non-farm investors, and institutional and government agencies. This paper reviews the agreements governing the relationships between farmers as tenants on farmland and landowners as lessors of farmland. This information is useful as farmers and landowners review the leasing arrangements for the coming year.
 
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Farm Bill 2002: Income Impacts of House Ag. Committee's Proposal
Gary Schnitkey, Paul Ellinger, Dale Lattz
FEFO 01-19, 09/25/2001
 

Abstract

The 1996 Farm Bill -- more formally known as the Federal Agriculture Improvement and Reform (FAIR) Act -- legislates the Agricultural Market Transition Act (AMTA) payments that farmers currently receive. This Bill and its associated AMTA payments will expire at the end of 2002. Sometime between now and early 2003 a new Farm Bill likely will be enacted by Congress. This "2002 Farm Bill" will replace the 1996 Farm Bill.
 
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Dairy Returns Fall in 2000
Dale Lattz
FEFO 01-18, 09/07/2001
 

Abstract

Significantly lower milk prices resulted in total economic costs exceeding returns for Illinois dairy producers in 2000, according to figures summarized by University of Illinois agricultural economists in cooperation with the Illinois Farm Business Farm Management Association.
 
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Net Farm Income on Grain Farms Projected Down in 2001
Gary Schnitkey, Paul Ellinger, Dale Lattz
FEFO 01-17, 08/17/2001
 

Abstract

The Illinois Agricultural Statistical Service (IASS) released their first estimates of 2001 yields for Illinois Crop Reporting Districts (see http://www.agr.state.il.us/agstats/releases/crop.htm). These yields, a $2.10 corn price, a $4.95 soybean price, and an overall 2.69 percent increase in operating expenses are used to project 2001 net farm incomes for 1,025 Illinois grain farms.
 
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Hog Producers Enjoy Profitable Times
Dale Lattz
FEFO 01-16, 08/14/2001
 

Abstract

After a disastrous year in 1998, hog production has become profitable again. A reduction in pork output, strong product demand and low feed costs have all contributed to the better times. While producers experienced their lowest returns on record in 1998, returns above all costs in 2000 were at their highest level since 1990.
 
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Do Some Farms Consistently Have High Profits?
Gary Schnitkey
FEFO 01-15, 07/21/2001
 

Abstract

Each year profits vary tremendously across grain farms. In 2000, for example, per acre management returns for Illinois grain farms having high-quality farmland averaged $7 per acre. One-third of the farms had returns below -$10 per acre while one-third of the farms had returns above $38 per acre.
 
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High/Low One-Third Grain Farm Comparison
Dale Lattz
FEFO 01-14, 07/08/2001
 

Abstract

As previous studies have shown, differences in efficiencies and profitability exist across farm operators. The degree of some of these differences is illustrated by examining 2000 data from the Illinois Farm Business Farm Management (FBFM) Association. Data for pure grain farms (no livestock) with over 260 tillable acres were sorted into 4 groups: northern Illinois, central Illinois with high productive soils, central Illinois with lower productive soils and southern Illinois. Data for each group was then ranked based on dollars of production per $1 of non-feed costs. Averages were then calculated for the high and low one-third group of farms.
 
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Costs and Grain Farm Size
Gary Schnitkey
FEFO 01-13, 06/21/2001
 

Abstract

A commonly held notion is that per acre costs decrease as number of acres farmed increase. There is little empirical support for this contention.
 
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Farm and Family Living Income and Expenses for 2000
Dale Lattz
FEFO 01-12, 06/08/2001
 

Abstract

In 2000, noncapital living expenses of 1,087 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $42,544 for the year or, in other words, $3,545 per month (Table 1). The average noncapital living expense in 2000 was 4.1 percent higher than 1999 and 6.1 percent higher than in 1998. Another $4,982 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $47,526 for 2000 compared with $45,225 for 1999, or a $2,301 increase per family. The average amount spent per family for capital items was $611 more, while noncapital expenses increased $1,690 per family. The sample farms were mainly grain farms located primarily in central and northern Illinois.
 
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Risks, Pre-Harvest Hedging, and Crop Insurance
Gary Schnitkey
FEFO 01-11, 05/17/2001
 

Abstract

Recently, research has examined risk reductions associated with levels of pre-harvest hedging for different crop insurance products. In general, modest levels of hedging decrease risk. In the example shown in figure 1, hedging up to 15 percent of expected production reduces risk. Then there is a range where risk levels change very little. In figure 1, this occurs between 15 and 65 percent of expected production. Hedging increases risk after some point (65 percent of expected production in figure 1).
 
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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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Per Acre Machinery Costs on Illinois Grain Farms
Gary Schnitkey
FEFO 01-09, 04/17/2001
 

Abstract

Summaries of Illinois Farm Business Farm Management (FBFM) records indicate that machinery costs on central Illinois grain farms having high-productivity farmland averaged $58.41 per acre in 2001. These costs are composed of machinery repairs ($13.97 per acre), machine hire and leasing ($7.25), fuel and oil ($8.95), light vehicle ($1.57), and machinery depreciation ($26.67). Machinery costs in northern Illinois are higher, averaging $71 per acre. Machinery costs in southern Illinois average $62 per acre, slightly higher than costs in central Illinois.
 
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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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2000 Farm Income Results Show Improvement
Gary Schnitkey
FEFO 01-07, 04/03/2001
 

Abstract

Average farm operator returns for labor and management on 3,143 Illinois farms increased in 2000 compared to returns experienced by producers in 1999. The 2000 returns were the highest since 1996. Good corn and soybean yields across most of the state along with continued strong livestock returns for most livestock enterprises were the major reasons for the improved incomes. Government farm program payments also continue to be an important factor in supporting farm incomes.
 
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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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Tools for Making Crop Insurance Decisions
Gary Schnitkey
FEFO 01-05, 03/06/2001
 

Abstract

Two tools for making crop insurance decisions are available at farmdoc, a web site maintained in the Department of Agricultural and Consumer Economics (www.farmdoc.uiuc.edu). These tools are located in farmdoc's crop insurance section and are 1) a Premium Calculator and 2) a Crop Insurance Evaluator.
 
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Crop Insurance and Marketing Decisions
Gary Schnitkey
FEFO 01-04, 02/20/2001
 

Abstract

The deadline for signing up for crop insurance is March 15th. By this date, farmers must choose between one of the six crop insurance products available in Illinois: Actual Production History (APH), Revenue Assurance (RA), Income Protection (IP), Crop Revenue Coverage (CRC), Group Risk Plan (GRP), and Group Risk Income Plan (GRIP).
 
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2001 Farmland Assessed Values Decrease for All Soil Types
Dwight Raab
FEFO 01-03, 02/07/2001
 

Abstract

For 2001, the certified farmland assessed values for soils of all productivity index values decreased 10% from the 2000 certified assessed values. This is largely the result of the interaction of the 1986 law limiting changes in certified farmland assessed valuation to no more than a 10% increase or a 10% decrease. The underlying economic conditions in Illinois agriculture are the driver of the limit down movement. Increasing production costs, relatively lower commodity prices, and a slightly increased interest rate all had a role in the decreasing certified assessed farmland values. The state of the agricultural economy in Illinois drives the use-value farmland assessment calculations. An noted above, commodity prices, general farm expenses, and interest rates all have an impact in the calculation of the assessed valuation of farmland in its use as farmland. The decrease in certified values for all soil productivity indexes was restricted by the 1986 ten percent limit law since the decrease in calculated assessment valuation from 2000 to 2001 exceeded ten percent. Each soil type identified in Illinois is assign a soil productivity index based on the production capacity of the soil. These certified assessed valuations were issued to county assessing officials in May of 2000 for use in 2001 farmland assessments. Property tax on the 2001 farmland assessments are paid in 2002.
 
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Deferred Taxes - A Financial Consideration
Dale Lattz
FEFO 01-02, 01/16/2001
 

Abstract

Deferred taxes are a financial liability that is receiving more and more consideration from agricultural lenders, accountants and other consultants that work with agricultural producers. What are deferred taxes? Deferred taxes are the income and self-employment taxes that would be due if a producer completely liquidated his or her's assets in the farm business.
 
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Year End Record Closing and Farm Analysis Considerations
Dale Lattz
FEFO 01-01, 01/02/2001
 

Abstract

The end of the year is not only a time for Holidays but also the close of the business year for most farmers. The majority of farm operators use a calendar year (January 1 - December 31) as their business year for income tax purposes and also to prepare financial statements about their operation. Even if a business is on a different fiscal year for tax reporting purposes, they may still want to prepare financial statements based on a calendar year.
 
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Government Payments To Illinois Grain Farms
Gary Schnitkey
FEFO 00-03, 12/19/2000
 

Abstract

Federal government payments have shored up net incomes on Illinois grain farms during the extended period of low commodity prices occurring since 1998. This article lists government payments received by crop farms in 2000. Impacts on farm decision-making then are examined.
 
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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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Grain Farm Incomes In 2000 And Prospects For 2001
Gary Schnitkey, Dale Lattz, Paul Ellinger
FEFO 00-01, 11/21/2000
 

Abstract

Projected net farm incomes for 1,037 Illinois grain farms suggest that 2000 incomes will be slightly lower than 1999 incomes. These 1,037 farms are enrolled in Illinois Farm Business Farm Management (FBFM) and have an average of 833 tillable acres. Average net income on these farms was $33,180 per farm in 1999. Projected 2000 net income is $32,414, about $750 lower than 1999 income.
 
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