Release of revenue and costs for corn, soybeans, wheat
Projections for 2013
Also included are projections for 2013. Revenue projections are made using an expected yield of 195 bushels for corn grown on high productivity farmland in central Illinois. A corn price of $4.90 is used in projections. The $4.90 projected price is above the $4.70 midpoint of WASDE projected prices, but is below current bids for harvest-time delivery. The $4.90 price presumes a normal crop which would lead to a reduction in corn prices.
Non-land costs are projected at $563 per acre, down from the 2012 level of $581 per acre. This projection assumes reductions in fertilizer costs.
In this case, operator and farmland return is $415 per acre, down from levels in the last three years. The $415 return is a return before paying for farmland, which would equals cash rent for farmland that is cash rented. Cash rents vary considerably, but a $300 per acre cash rent occurs with some frequency. At a $300 cash rent, returns to the farmer would be $115 per acre.
Higher costs point to higher break-even price level. At a $300 per acre cash rent, total costs equal $863 per acre ($563 non-land costs + $300 land rent). At a 195 bushel yield, the break-even price is $4.43 per bushel ($863 total costs / 195 bushels per acre). Prices below $4.43 would result in negative returns.
While yields were down in 2012, operator and farmland returns were positive in 2012. Operator and farmland returns are projected lower in 2013 than in 2012.