Another Rough Income Year for Grain Farmers

ifr170602–146
Another Rough Income Year for Grain Farmers
Gary Schnitkey, Agricultural Economist - University of Illinois

It looks like 2017 will be another rough year for grain farmers in the United States. Todd Gleason has more on the projected incomes.

Even in Illinois, where the trend line yield for corn is 200…
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Even in Illinois, where the trend line yield for corn is 200 bushels to the acre and 61 for soybeans, the average income on a 1500 acre grain for this year is just $25,000. That’s not good says University of Illinois Agricultural Economist Gary Schnitkey.

Schnitkey :24 …if these projections hold.

Quote Summary - That $25,000 isn’t enough to cover all the family living withdrawals and capital purchase expenses needed for a family farm of this size. Seventy to eighty-thousand dollars is needed to be sustainable in the long run. So, we are looking, again, at some financial deterioration if these projections hold.

It is a projection that wasn’t quite so low earlier in the year. Then, like today, Schnitkey was using an average cash sales price of $3.70 a bushel in the Illinois crop budget for corn.

Schnitkey :29 …pretty representative soybean price in central Illinois.

What has caused our forecast to come down is the decline in soybean prices in recent weeks. Earlier in the year we were using $9.70 for price. It has now come down and we are using $9.00 in our projections. Even this is above fall delivery prices right now which is about $8.85. It is a pretty representative soybean price in central Illinois.

A decline in soybean prices to $9.00 likely will trigger 2017 ARC-CO payments, given county soybean yields are at trend levels. As a result, ILLINOIS’s 2017 projections build in a $15 per acre government payment. It arrive until the fall of 2018, but an estimated $20 payment from last year’s crop should arrive this fall.

In 2017, revenue is projected to be $755 per acre for corn, down by $77 per acre from last year. Gross revenue for soybeans is projected at $564 per acre, $140 per acre lower than in 2016.