With dismal profit margins, farmers need to plan on cutting costs and negotiating lower land rental rates. University of Illinois (U of I) recently released crop budgets for three regions in Illinois based on historical returns and costs to discover dismal profit forecasts for the 2019 season.
“[Projected] return level is similar to return levels in 2005, more than 10 years ago,” said Gary Schnitkey and Krista Swanson from U of I in a recent news release. “In 2005, average cash rent in norther Illinois was $137 per acre, [which is] $101 per acre lower than current cash rents.”
Even stellar yields won’t necessarily improve profit possibilities. U of I research indicates even a 221 bu. per acre corn-after-soybean yield would result in returns of $218 per acre without land cost. This is still below the $238 per acre average cash rent for the area.
For the first time since 2013, corn is projected to be more profitable than soybeans. U of I research says this could lead to more corn acres in 2019.
See their projections in the charts below: