Farm Economics Facts & Opinions (FEFO) Archive

2010 • 2009 • 2008 • 2007 • 2006 • 2005 • 2004 • 2003 • 2002 • 2001 • 2000

2010
  • November 2, 2010 - 2011 Return Projections Suggest Corn Will be More Profitable than Soybeans
    Currently, budgeting for the 2011 crop year indicates that corn will be much more profitable than soybeans.
  • October 18, 2010 - Farmland Price Outlook: Are Farmland Prices Too High Relative to Returns and Interest Rates
    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.
  • September 24, 2010 - 2008 SURE Window Closes September 30
    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.
  • August 30, 2010 - COMBOs Product Released for 2011 Crop Insurance Year
    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.
  • August 16, 2010 - 2011 Crop Budgets: Implications for Crop Rotations and Returns
    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.
  • August 13, 2010 - Illinois Farm Real Estate Values Continue on Upward Trend
    Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state.
  • July 26, 2010 - Power Costs Increased on Grain Farms
    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).
  • June 4, 2010 - Working Field Days in Illinois
    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.
  • May 24, 2010 - Revised Corn and Soybean Budgets for 2009 and 2010
    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.
  • April 28, 2010 - Estimated 2009 and 2010 ACRE Payments
    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.
  • April 23, 2010 - Lower Crop Returns and Higher Costs Lead to Lower Farm Earnings in 2009
    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.
  • April 12, 2010 - County Cash Rents in 2009
    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.
  • April 5, 2010 - Illinois Corn and Soybean Yields and GRIP Payments in 2009
    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.
  • March 29, 2010 - Changes in Crop Acres Since Freedom to Farm
    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.
  • March 11, 2010 - GRIP Premiums in 2010
    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.
  • March 5, 2010 - 2010 Crop Insurance Update: Model Programs and Common Questions
    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.
  • February 4, 2010 - Fertilizer Prices in 2008, 2009, and 2010
    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.
  • January 27, 2010 - Yield Increases on Illinois Crops: Questions for the Future
    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.
2009
  • December 21, 2009 - ACRE Payment Estimates: Release of FAST ACRE Payment Estimator
    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.
  • November 30, 2009 - Profit Margins Turn Negative in 2008, Likely to Continue with Projected Low Milk Prices in 2009
    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.
  • October 29, 2009 - Late Planting Wheat and Crop Insurance
    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.
  • October 21, 2009 - Drying Costs and Shrink Losses Are Large in 2009
    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.
  • October 9, 2009 - A Historic Look at Illinois Farm Real Estate Values
    The U.S.D.A. estimates that land values have declined slightly in Illinois.
  • September 18, 2009 - Crop Priority in ACRE
    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.
  • September 9, 2009 - Corn and Soybean Returns in 2009 and 2010
    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
  • August 5, 2009 - ACRE Will Likely Pay More than the Traditional Alternative for Receiving Farm Commodity Payments
    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.
  • July 20, 2009 - Historical Analysis of ACRE
    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.
  • June 3, 2009 - Evaluating Economic Alternatives for Late Planting
    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
  • June 1, 2009 - Late Planting and Crop Insurance
    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.
  • May 12, 2009 - Average Cash Rents Per County in 2008
    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.
  • April 30, 2009 - Five-Year Olympic Average Yields and ACRE
    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.
  • March 27, 2009 - Updated 2009 Budgets: Return Projections, 2010 Cash Rents, and Planting Decisions
    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.
  • March 9, 2009 - GRIP Provides Superior Price Protection to CRC or RA
    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).
  • February 27, 2009 - The ACRE Program Decision and Some Illustrative Examples
    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).
  • February 13, 2009 - 2009 Crop Insurance Changes Suggest Considering Either Grip or Enterprise Units and BE for CRC and RA-HP
    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.
  • January 14, 2009 - Fertilizer Prices Likely to Decline in 2009
    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.
  • January 9, 2009 - Questions and Answers About the ACRE Provision of the 2008 Farm Bill
    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.
20082007
  • December 6, 2007 - Projected Corn and Soybean Returns in 2008
    Corn production is projected more profitable than soybeans on highly productive farmland. Soybeans may be more profitable on less productive farmland.
  • November 6, 2007 - Non-Land Costs for Corn and Soybeans Projected to Increase in 2008
    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.
  • October 22, 2007 - Costs Exceed Returns for Dairy Producers in 2006, Profit Margins Likely to Turn Positive in 2007
    Lower milk prices and higher costs resulted in total economic costs exceeding returns in 2006, the first time this has occurred in three years
  • October 10, 2007 - Are Farmland Prices in Line with Farmland Returns?
    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.
  • August 15, 2007 - Illinois Farm Real Estate Values Continue Double Digit Increases
    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.
  • August 8, 2007 - Flexible Cash Leases Based on Crop Insurance Parameters
    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.
  • July 13, 2007 - Consider Higher Costs and Additional Risk When Negotiating 2008 Cash Rents
    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.
  • May 30, 2007 - Crude Oil Price Variability and its Impact on Break-even Corn Prices
    Besides potentially raising the average corn price, increasing use of corn to make ethanol likely will increase corn price variability.
  • May 16, 2007 - Farm and Family Living Income and Expenses for 2006
    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.
  • May 2, 2007 - Good Yields and Higher Grain Prices Improve Farm Earnings in 2006
    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.
  • April 23, 2007 - Crop Insurance Decisions Associated with Wheat Failure
    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.
  • April 6, 2007 - Geographical Distribution of Corn and Soybean Planting Intentions
    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.
  • March 30, 2007 - Farmland Price Increases Continue: Are They in Line with Farmland Returns?
    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.
  • March 27, 2007 - Cost to Produce Corn and Soybeans in Illinois-2006
    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.
  • February 28, 2007 - GRIP in 2007
    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
  • February 23, 2007 - Why Not All Corn?
    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?
  • January 19, 2007 - Higher Prices and Crop Insurance: A Double-Edged Sword
    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.
  • January 11, 2007 - Higher Yields and Grain Prices Result in Higher Farm Income Projections for 2006
    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.
2006
  • December 28, 2006 - Per Acre Machinery Costs and Values on Illinois FBFM Farms, 2005
    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.
  • December 19, 2006 - Corn Acre Changes Likely Will Vary by Region and Farm Size
    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.
  • December 5, 2006 - Are Increasing Cash Rents Justified?
    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.
  • November 21, 2006 - Profitable 2006 Will Result In Three Consecutive Years Of Profits For Hog Producerse
    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.
  • November 13, 2006 - Costs And Returns For Illinois Beef Producers In 2005
    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.
  • October 30, 2006 - 2007 Crop Budgets Indicate Higher Returns for Corn and Wheat
    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.
  • October 20, 2006 - Returns Exceed Costs For Dairy Producers In 2005, Profit Margins Likely To Turn Negative In 2006
    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.
  • September 20, 2006 - Machinery Cost Estimates for 2006
    Estimated per acre machinery costs are estimated to be 11 to 44% higher in 2006 as compared to 2005.
  • September 15, 2006 - Future Increase in Corn Acres Will Vary Across the Corn-Belt
    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.
  • August 15, 2006 - Corn and Soybean Prices for More Corn in 2007
    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.
  • August 10, 2006 - Increase in Illinois Land Real Estate Values Accelerates
    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.
  • July 31, 2006 - Has Variability in Corn Yields Been Reduced?
    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.
  • July 10, 2006 - Cost Increases: Its Not Just Energy
    Recent attention has focused on how rising energy prices have increased grain production costs. However, energy is not the only factor causing cost increases.
  • June 19, 2006 - Farm and Family Living Income and Expense for 2005
    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.
  • June 1, 2006 - Costs to Produce Corn and Soybeans in Illinois — 2005
    Illinois FBFM records indicate that costs to produce corn and soybeans increased in 2005 compared to 2004.
  • May 17, 2006 - Lower Corn Yields and Higher Input Costs Reduce Farm Earnings in 2005
    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.
  • April 19, 2006 - Costs and Fuel Use for Alternative Tillage Systems
    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.
  • April 6, 2006 - 2006 Planting Decisions Given the March Planting Intentions Report
    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.
  • March 10, 2006 - How Bad Were 2005 Corn Yields?
    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.
  • March 6, 2006 - Choice of Revenue Products: Base and Harvest Prices
    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.
  • February 27, 2006 - GRP and GRIP Payments: Preliminary 2005 Estimates and Historical GRIP Payments
    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.
  • February 13, 2006 - Expected Yield Increases and Choice between Group and Farm Crop Insurance
    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.
  • January 23, 2006 - Premium Reduction Plans for Crop Insurance
    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.
2005
  • December 28, 2005 - Considerably Lower Farm Incomes Projected for 2005
    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.
  • December 23, 2005 - New Crop Budgeting Tools Released on Farmdoc
    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.
  • December 5, 2005 - Projected Returns For Corn And Soybean In 2006
    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.
  • November 14, 2005 - Profits Should Continue For Hog Producers In 2005 After Profitable 2004
    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.
  • October 26, 2005 - Costs And Returns For Illinois Beef Products In 2004
    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.
  • September 30, 2005 - Variable Cost Increases for Corn and Soybeans in Historical Perspective
    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.
  • September 26, 2005 - Effect of Higher Fuel Prices on Machinery Costs
    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.
  • September 19, 2005 - Dairy Producers Benefit From Record High Milk Prices In 2004, Profits Should Continue In 2005
    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.
  • August 30, 2005 - 2005 and 2006 Crop Budgets: Implications for Cash Rents and Production Decisions
    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.
  • August 15, 2005 - Increase In Illinois Farm Real Estate Values Continue
    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.
  • July 25, 2005 - Insurance Payment Estimates for 2005
    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.
  • July 25, 2005 - Spraying for Pests and Its Impacts on Crop Insurance Coverage
    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.
  • June 25, 2005 - Growth In Farm Size
    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%.
  • June 10, 2005 - Agricultural Debt Increases But Still Manageable
    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.
  • May 26, 2005 - Farm And Family Living Income And Expenses For 2004
    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.
  • May 9, 2005 - Cost To Produce Corn And Soybeans In Illinois?2004
    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.
  • April 19, 2005 - Machinery Cost Estimates in 2005
    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).
  • April 14, 2005 - Record Yields Boost 2004 Farm Earnings
    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.
  • March 28, 2005 - Soybean Rust Considerations in Share-rent Arrangements and in Crop Insurance
    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.
  • March 15, 2005 - A Soybean Rust Scenario Model: 2005 Crop Year Decision Making In Illinois
    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.
  • February 28, 2005 - Crop Insurance Decisions in 2005
    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.
  • February 2, 2005 - Group Risk Income Plans Likely to Pay in Many Counties for 2004 Crops
    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.
  • January 31, 2005 - Lower Grain Prices Result in Increased Loan Deficiency Payment Activity for the 2004 Corn and Soybean Crop
    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.
  • January 11, 2005 - Corn Returns versus Soybean Returns: Do Farms Differ?
    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.
2004
  • November 30, 2004 - The Economics Of Adding More Corn To Corn-Soybean Rotations
    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.
  • November 22, 2004 - 2005 Corn And Soybean Revenue And Cost Estimates
    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).
  • November 1, 2004 - 2004 Crop Insurance Changes And Historical Crop Insurance Use
    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.
  • September 22, 2004 - Returns Improve Marginally For Dairy Producers In 2003, Profits Should Return In 2004
    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.
  • September 14, 2004 - Costs And Returns For Illinois Beef Producers In 2003
    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.
  • September 2, 2004 - Hog Producers Should Experience A Profitable Year In 2004 After Breakeven Situation In 2003
    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.
  • August 26, 2004 - Grain Delivery Comparison Model: Release Of A New FAST Tool
    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).
  • August 18, 2004 - An Updated Look At Illinois Farm Real Estate Values
    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.
  • August 15, 2004 - Projected 2005 Commodity Prices Suggest Caution In Farm Rental Bidding
    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.
  • July 28, 2004 - Per Acre Machinery Costs And Values On Illinois Farms, 2003
    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).
  • June 11, 2004 - Farmland Prices, Net Rents And Interest Rates Since 1970
    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.
  • May 18, 2004 - Illinois Farm Incomes Higher in 2003
    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.
  • April 30, 2004 - Farm and Family Living Income and Expenses for 2003
    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.
  • April 13, 2004 - Cost To Produce Corn And Soybeans In Illinois-2003
    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.
  • March 31, 2004 - Planter Costs For Alternative Farm Sizes
    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.
  • March 31, 2004 - Skip-Row Planter Costs
    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.
  • March 9, 2004 - Crop Costs On Illinois Grain Farms
    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.
  • February 19, 2004 - Insurance Premium Higher In 2004
    Premiums for most crop insurance products will be higher in 2004 compared to 2003. Some premiums will increase by over 50%.
  • February 11, 2004 - Grip-Hr: An Analysis Of Returns And Risks
    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.
  • January 26, 2004 - Group Crop Insurance Plans
    A new group crop insurance product was introduced in 2004, bringing the total number of group products to three. These three are:
2003
  • November 30, 2003 - What Do 2003 Corn And Soybean Yields Indicate About Future Yields?
    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.
  • November 11, 2003 - Higher Grain Prices Result In Less Loan Deficiency Payment Activity
    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.
  • November 7, 2003 - Projected And Historical Crop Returns: Keep Soybeans In 2004
    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).
  • November 7, 2003 - Understanding USDA Corn And Soybean Production Estimates
    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.
  • September 28, 2003 - Crop Acre Changes On Illinois Farm Business Farm Management Farms, 1995 Through 2002
    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.
  • September 8, 2003 - Costs and Returns for Illinois Beef Producers in 2002
    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.
  • August 29, 2003 - Recognizing Income and Budgeting for Counter Cyclical Payments
    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.
  • August 27, 2003 - A Historic Look at Illinois Farm Real Estate Values
    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.
  • July 31, 2003 - Dairy Profits in 2002
    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).
  • July 22, 2003 - Release of Crop Budgeting Tool
    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.
  • June 30, 2003 - Hog Profits in 2002 and 2003
    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.
  • June 27, 2003 - New Machinery Cost Estimates and Planting Costs
    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.
  • May 30, 2003 - Size Economies on Grain Farms
    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.
  • May 7, 2003 - Farm and Family Living Expenses for 2002
    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.
  • April 25, 2003 - Cost to Produce Corn and Soybeans in Illinois — 2002
    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.
  • April 8, 2003 - Farm Incomes Vary Considerably Across Illinois in 2002
    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.
  • March 30, 2003 - Can 1988 Drought Yields Occur Again in Northern and Central Illinois?
    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.
  • March 19, 2003 - Increases in Fuel Related Costs Lead to Higher Production Costs
    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.
  • February 28, 2003 - Historical Cropping Patterns on Illinois Grain Farms
    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.
  • February 17, 2003 - Analyzing the Profitability of Your Farm Business
    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.
  • January 31, 2003 - Revenue Guarantees on Crop Insurance Products
    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.
  • January 27, 2003 - Cash Rent Worksheet
    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.
2002
  • December 31, 2002 - Time to Check Corn and Soybean Yields
    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.
  • December 23, 2002 - Cash Rents and Equivalent Cash Rents in Illinois
    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.
  • November 27, 2002 - Lower, Highly Variable Incomes Projected for 2002
    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.
  • November 20, 2002 - Farmland Leasing Update
    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.
  • October 31, 2002 - Costs and Returns for Beef Producers, 2001
    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.
  • October 18, 2002 - Profitable Year for Dairy Producers in 2001
    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.
  • September 30, 2002 - Cash Flows Tight on Many Grain Farms Because of Reduced Government Payments
    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.
  • September 23, 2002 - Crop Rotations in 2003: More Wheat and Corn?
    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.
  • August 30, 2002 - Options for Determining Base Acres Under the 2002 Farm Bill
    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/assets/management/fefo/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.
  • August 6, 2002 - Hog Production Profitable in 2001, Red Ink on the Way
    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.
  • July 24, 2002 - Corn and Bean Acreage in Illinois Under The 2002 Farm Bill
    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.
  • July 17, 2002 - 2002 Farm Bill Payment Limitations
    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).
  • June 14, 2002 - Farm Program Payment Comparisons under the 1996 and 2002 Farm Bill
    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.
  • June 5, 2002 - Updating Acres and Yields Under the 2002 Farm Bill
    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.
  • May 2, 2002 - Farm and Family Living Income and Expenses for 2001
    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.
  • April 17, 2002 - Cost to Produce Corn and Soybeans in Illinois–2001
    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.
  • April 11, 2002 - Average Prices Received for Corn and Soybeans, 1995 Through 2001
    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.
  • March 27, 2002 - Study Show Drop In 2001 Farm Incomes
    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.
  • March 11, 2002 - 2002 IFARM Insurance Evaluator
    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.
  • February 22, 2002 - 2002 Crop Insurance Decisions
    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.
  • February 8, 2002 - 2002 IFARM Premium Calculator
    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/).
  • January 31, 2002 - Analyzing Your Farm Business
    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.
  • January 15, 2002 - Revenue and Variable Costs for Corn and Soybeans
    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.
2001
  • December 17, 2001 - New Spreadsheet Tool for Machinery Economics
    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).
  • December 6, 2001 - Landlord Returns from Illinois Farmland
    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.
  • November 29, 2001 - Corn As A Non-Ethanol Fuel Source
    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.
  • November 12, 2001 - Benchmark Machinery Values on Grain Farms
    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).
  • October 19, 2001 - Costs and Returns for Illinois Beef Production in 2000
    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.
  • October 9, 2001 - Perspectives on Farmland Leasing
    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.
  • September 25, 2001 - Farm Bill 2002: Income Impacts of House Ag. Committee’s Proposal
    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.
  • September 7, 2001 - Dairy Returns Fall in 2000
    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.
  • August 17, 2001 - Net Farm Income on Grain Farms Projected Down in 2001
    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.
  • August 14, 2001 - Hog Producers Enjoy Profitable Times
    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.
  • July 21, 2001 - Do Some Farms Consistently Have High Profits?
    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.
  • July 8, 2001 - High/Low One-Third Grain Farm Comparison
    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.
  • June 21, 2001 - Costs and Grain Farm Size
    A commonly held notion is that per acre costs decrease as number of acres farmed increase. There is little empirical support for this contention.
  • June 8, 2001 - Farm and Family Living Income and Expenses for 2000
    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.
  • May 17, 2001 - Risks, Pre-Harvest Hedging, and Crop Insurance
    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).
  • May 2, 2001 - Costs to Produce Corn and Soybeans in Illinois — 2000
    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.
  • April 17, 2001 - Per Acre Machinery Costs on Illinois Grain Farms
    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.
  • April 5, 2001 - A Switch to Soybean Acres In Illinois?
    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.
  • April 3, 2001 - 2000 Farm Income Results Show Improvement
    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.
  • March 20, 2001 - Do You Really Need to Know Production Costs?
    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.
  • March 6, 2001 - Tools for Making Crop Insurance Decisions
    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.
  • February 20, 2001 - Crop Insurance and Marketing Decisions
    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).
  • February 7, 2001 - 2001 Farmland Assessed Values Decrease for All Soil Types
    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.
  • January 16, 2001 - Deferred Taxes – A Financial Consideration
    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.
  • January 2, 2001 - Year End Record Closing and Farm Analysis Considerations
    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.
2000
  • December 19, 2000 - Government Payments To Illinois Grain Farms
    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.
  • December 5, 2000 - Production Costs for Corn and Soybeans Projected to Rise in 2001
    Crop production costs in 2001 will be higher than 2000 production costs. Fuel, nitrogen fertilizer, and drying costs contribute to this increase.
  • November 21, 2000 - Grain Farm Incomes In 2000 And Prospects For 2001
    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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