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.