Crop budgets and acreage implications for 2014
Looking at the total U.S. costs of production at the national level, the breakeven for corn is $3.98 per bushel, $4.39 using the corn-following corn assumptions. Soybean costs are estimated at $9.89 per bushel, wheat is $7.41 per bushel and cotton is $1.15 per pound. The highest per bushel costs for corn are in the Eastern Uplands region but followed closely by the Heartland where land prices are very high.
Soybean breakeven prices are highest in the Prairie Gateway region. In general, net returns over all costs remain positive for the major crops, but they are generally lower than they have been recently. While that may be true overall, there will be some higher cost producers that don’t cover all costs. Still, the data do not seem to support a significant decline in total crop acreage.
We could see some low productive land that was brought into production recently in response to the high crop prices left idle in 2014, but probably not very much. The shift in net returns that factor soybeans in the Heartland region could cause some shifting away from corn acres there but overall it looks like corn acreage will stay high. If yields snap back to trend and demand doesn’t increase substantially, the result could be another big increase in corn ending stocks. Perhaps to near 3 billion bushels.
Follow this link to see the regional and national budgets for corn, soybeans, wheat and cotton for the 2011 through 2014 crops: http://media.doane.com/binary/cropbudgets.zip
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