$276 Corn And $199 Soybeans Realistic Per-Acre Profits, Illinois Economist Says
Just two months ago, many ag economists and other industry members projected more soybeans than corn would be planted this spring because of corn’s higher input costs and lower break-even estimates.
But how quickly things can change – and they have.
Today, because of world events that have transpired, corn prices have picked up, says Gary Schnitkey, University of Illinois Extension ag economist and Soybean Industry Chair in Agricultural Strategy.
“We see corn being more profitable than soybeans in all parts of Illinois this season,” Schnitkey told Chip Flory, host of AgriTalk, on Wednesday morning.
That’s true for some other parts of the Corn Belt as well, he adds, even though fertilizer costs have more than doubled for many farmers between 2021 and this spring.
Spreadsheets Show Profits
Schnitkey estimates, with budgets based on fall delivery prices of $6 corn and $14 soybeans, central Illinois farmers will see a return on investment (ROI) of $276 per acre for corn and $199 per acre for soybeans. That means corn would top the ROI for soybeans by a cool $77 per acre.
Of course, prices are subject to change and can change abruptly—much like they have during the last couple of months. In fact, Schnitkey says he has never seen a more dynamic marketplace for commodities during his career.
“I have not seen anything like this in my 30-plus years of being an ag economist,” he says.
As for total crop estimates, the most recent estimate from USDA is for 92 million acres of corn and 88 million acres of soybeans. Those are likely to change some, Schnitkey says, even as planting time in the Midwest nears.
“I’d probably say those acres are on the lower side for corn and the higher side of soybeans,” he says.
Foggy Outlook For 2023
Too many unknowns in the marketplace create a challenge to get any read on what the 2023 cropping year might hold.
The dynamics in place for fertilizer supplies are still at work in the marketplace and are likely to impact next season, Schnitkey says. That means fertilizer prices will remain elevated going into this next fall.
The Russia-Ukraine conflict complicates the picture, too, though it’s affecting other countries significantly more than the U.S. at this point.
“I would tell U.S. farmers if they think they have fertilizer problems to realize it’s worse nearly everywhere else in the world,” he says. “Brazil imports 90% of its nitrogen, and a big part of it from Russia and China, so they’re going to potentially have a huge problem.”
