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Even as profits fall, farmers maintain investment in corn


URBANA, Ill. — Illinois farmers planted an estimated 200,000 fewer acres of corn in 2018 than in 2017, according to the USDA. That didn’t stop them, however, from maintaining a nearly identical $4 billion investment in their crop.

This is according to University of Illinois agricultural economist Gary Schnitkey, who found that Illinois corn growers are spending an average $8 more per acre to produce their 11 million-acre crop this year.

He considered average 2018 prices for corn seed, inputs, drying, storage and crop insurance, among other factors, to determine that farmers are spending an average $353 per corn acre in 2018, compared with $345 last year. The projections assume a yield of 205 bushels per acre and a price of $3.60 in 2018.

Schnitkey offers varied projections for corn growers with high-productivity farmland in northern, central and southern Illinois, each with profoundly negative projected farmer returns for the 2018 crop.

Northern Illinois farmers will spend an average $347 per corn acre in direct costs to produce their crop, while central Illinois farmers will invest an average $372. Those in southern Illinois will pay an average of $337 to produce an acre of corn.

Profit projections, which also consider power and overhead costs, are not pretty: In southern Illinois, corn producers stand to lose an average of $127 an acre based on $3.60 per-bushel corn. Northern Illinois corn farmers will lose an average of $86, while those in central Illinois will see a “return” of $89 an acre.

A similar study conducted by The Ohio State University concluded corn growers in the Buckeye State will lose an average of $93.44 an acre after variable and fixed costs are deducted from a presumed return of 167 bushels an acre, at $4 per bushel. The outlook improves with yield production, however: Ohio farmers will lose just $30.05 if yields reach 210 bushels.

A 2018 Indiana crop cost and return guide offered by Purdue University in October 2017 helps illustrate how much variable costs have changed in less than one growing season.

Purdue’s estimated crop budget for high-productivity soil – assuming an expected yield of 204 bushels per acre at $3.70 for rotated corn – projected $322 in revenue per acre based on $433 an acre in total variable costs for 2018. Unlike the Illinois and Ohio studies, land costs were not considered in the Purdue return projections.

As of July 15, the NASDAQ commodity futures price quote for corn was at $3.41 per bushel. Simultaneously, increased costs for seeds, equipment, fuel and fertilizer continue to put downward pressure on farm profits, according to Schnitkey and other agricultural economists.

His full report on Illinois crop revenues and costs can be found in the management section of farmdoc at www.farmdoc.illinois.edu

Purdue’s 2018 Crop Cost and Return Guide can be accessed through the university extension website at https://web.extension.illinois.edu while OSU’s Corn Production Budget – 2018 one-sheet is available through the College of Food, Agricultural and Environmental Sciences website at https://cfaes.osu.edu

8/2/2018