How Long Can You Stand Low Corn Prices?

September 14, 2016 02:24 PM
 
How Long Can You Stand Low Corn Prices?

Farm grain revenues are getting hit with a double whammy of lower corn prices and higher corn costs.  But profitable soybeans  are a bright spot for producers.

In early trading Wednesday, December corn was still caught in the $3 range, moving up 1.25 cents at 331.25. November soybeans were trading  in the $9.44 to $9.44 ¼  range, sliding from an earlier high of $9.51.

So what should farmers do, with no end in sight of lower corn prices and higher corn costs?

Here are five takeaways from  a webinar on farm grain income by Prof. Gary Schnitkey, of the University of Illinois at Urbana-Champaign:

1. Plan for grain income in 2017 to be no higher, or even less than it was in 2016. (In 2016, Illinois corn revenue was down $68 at $774 per acre, while soybean revenue fell $50 to $613 per acre.)

2. Keep in mind that the breakeven prices are around $9 for soybeans; $3.88 for corn.

3. Expect average cash rents to go down, and factor in ARC-CO payments for cash flow.

4. Remember that although fertilizer costs have come down, the cost of seeds has not.

5. Consider switching corn acres to soybeans, which have a higher price and lower production cost.

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Comments

 
Spell Check

Rick meyer
Bellaire , TX
9/15/2016 10:47 PM
 

  Farmers need to figure out a way to push back on these seed companies.

 
 
John Doe
Luverne, ND
9/16/2016 10:08 AM
 

  Flying farmer, That is by far the best post I've read in my life I believe!! We've been saying that on our farm for a long time. We as farmers need to quite having measuring contests!!, But there's always gonna be that idiot that will never understand that! Wake up farmers, it's extremely easy to understand!!

 
 
s crowley
savannah, MO
9/16/2016 08:48 AM
 

  Assuming corn price were to hold at $3.25 at the CME and a basis of about 30 cents. Has anyone calculated what cash rent would have to be to break even? I think that is the only variable cost open to real adjustment which actual producers have some control over. my guess is that cash rent amount would not support $10,000/acre

 
 

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