WORTHINGTON, Minn — The fall crop harvest is quickly approaching. With corn silage harvest completed on many farms, next comes the soybean and corn harvest. With the recent dry weather, many farmers are hoping to have little to no drying costs for corn. The drier weather conditions in August took the top off yields, but it still looks like an excellent crop.
So, what is the outlook for this year’s crops? Until recently corn prices were at or below $3.00 and soybean prices were at or below $8.00. But with recent purchases from China and a shrinking crop from earlier U.S. Department of Agriculture predictions, corn and soybeans prices have rallied to above $3.15 and soybeans above $9.30. With projected average productions costs in 2020 of $743 per acre for corn and $483 per acre for soybeans, how does this compare to projected income?
Using high yields of 250 bushels per acre on corn and 60 bushels for soybeans, at current prices gross income would be $787.50 for corn and $558 for soybeans. Using lower yields of 225 bushels per acre for corn and 55 bushels for soybeans, gross income would be $708.75 for corn and $511.50 for soybeans. Using historical average yields of 190 bushels per acre for corn and 50 bushels for soybeans, both crops would be below the above-listed production costs.
Using the total production costs divided by prices yields necessary to cover average production costs, a farmer would need yields of 236 bushels per acre for corn and 52 bushels per acre for soybeans. Overall yields for Minnesota will vary widely and so will gross income.
This year, 46 counties are estimated to receive a soybean farm bill ARC-County payment averaging $26 per acre with a high of $51 and a low of $1. For corn, only 12 counties are estimated to receive an ARC-CO corn payment averaging $52 with a high of $70 and a low of $8 per acre. Most of these counties are in southern and southwestern Minnesota. These numbers are from a spreadsheet available at the University of Illinois Extension website.
For wheat, near-maximum ARC-CO payments are likely for many areas.
Any farmer in Minnesota could have chosen to take PLC coverage instead of ARC-CO. This program pays if the marketing year average prices are below the reference price of $3.70 for corn. With a projected market year average price of $3.60, PLC would pay 10 cents per bushel. For soybeans, no PLC payments are likely at a market year average price of $8.55 per bushel. For wheat, a PLC payment of 92 cents per bushel is likely with at $5.50 reference price and a $4.58 per bushel market year average price.
This article was submitted by Dave Bau, University of Minnesota Extension.