Farm Economics Facts & Opinions (FEFO) Archive

Currently, budgeting for the 2011 crop year indicates that corn will be much more profitable than soybeans.

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.

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.

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.

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.

Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cash rents by state.

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).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.