Black Ink for Major Crops in 2013

January 29, 2013 08:44 PM
Black Ink for Major Crops in 2013

Corn, soybeans and wheat expected to be profitable for new crop year

Corn, soybeans and wheat all look to be profitable for 2013, just not like 2012. Corn appears to be far more profitable than either soybeans or wheat, according to crop budgets from The Ohio State University (OSU).

"Input costs have increased from 2012, but high prices for 2013 crops will allow producers to plan for positive margins this year," says Barry Ward, OSU ag economist. The budgets show variable corn costs to be 4% higher, soybeans 6% higher and wheat 2.5% higher than in 2012.

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"Higher commodity prices and higher costs point to another risky production year as the cash investment for corn will top $400 per acre, and some production scenarios are closer to $450," Ward says. That’s nearly double the cash cost of $200 to $260 for soybeans and wheat.

Budgets show a return above total costs of $240 per acre and a return to labor and management of $339 per acre with yields of 190 bu. per acre. For a 158 bu. per acre yield, the return above total costs is $148 per acre, with a return to labor and management of $238. That assumes a corn price of $6.15 per bushel. On a per-bushel basis, costs are $4.89 for 190-bu. corn and higher in lower-yielding scenarios.

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The return above total costs for soybeans is $45 per acre and return to labor and management is $107, assuming a 55 bu. yield. A 46 bu. per acre yield shows a $4 per acre return above total costs and a $60 return to labor and management. This is using a $12.70 per bushel market price for the 2013 crop. Total per-bushel costs are $12 per bushel for soybeans yielding 55 bu. per acre.

For wheat, the return above total costs is $38 for a crop yielding 84 bu., with a return to labor and management of $94 (grain only). For wheat yielding 70 bu. per acre, the return above total costs drops to $11 and the return to labor and management to $60. Return above total costs for wheat straw comes only to $144 per acre for wheat yielding 84 bu. per acre. Wheat prices are projected at $8.45 per bushel.

Returns and per-acre costs will vary, but producers can finish in the black.

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