LISTEN – 2016 Gross Farm Revenue & Income | an interview with Gary Schnitkey https://t.co/4PcEUGAS23 on #SoundCloud
— Todd E. Gleason (@commodityweek) November 29, 2016
University of Illinois agricultural economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“2016 Gross Revenue and Income Projections for Corn and Soybeans in Central Illinois“) that, “U.S. Department of Agriculture projects 2016 yield for Illinois at 202 bushels per acre, the highest yield on record, which is 2 bushels higher than the 200 bushel Illinois yield in 2014. Farm reports suggest that central Illinois is having yields near those of 2012. As a result, a 231 bushel per acre yield is used for central Illinois, high-productivity farmland, the same yield for this group in 2014. A $3.30 corn price is used in making 2016 projection.
“A 231 yield and a $3.30 price results in $762 of crop revenue, slightly higher than 2015 crop revenue of $759 per acre…[T]he 2016 ARC-CO payments — which will be received in the fall of 2017 – are projected at $20 per acre…[and]… [C]rop insurance is estimated to be $10 per acre. This is the same as the average for 2014.”
The farmdoc update noted that, “Given these estimates, gross revenue for corn is estimated at $792 per acre, down by $38 per acre from the 2015 level of $830 per acre (see Figure 1). Since a high of $1,192 per acre in 2012, gross revenue for corn has decreased by $400 per acre.”
Fig 1 – farmdoc
Yesterday’s update also pointed out that, “Gross revenue is projected below average costs on cash rent farmland. In 2016, costs are projected at $811 per acre, $19 higher than gross revenue. If projections hold, 2016 will be the third year in a row where total costs exceed gross revenue.”
With respect to soybeans, Dr. Schnitkey stated that, “…2016 gross revenue is projected to be $718 per acre, up by $66 per acre from $651 per acre in 2015 (see Figure 2)…[U]nlike corn, soybeans are projected to be profitable in 2016. Total costs are projected at $608 per acre, $110 lower than gross revenue.”
Fig 2 – farmdoc
Finally, yesterday’s update indicated that, “Figure 3 shows gross revenues and costs for a blended acre of corn and soybeans given that 60% of the acre is in corn and 40% are in soybeans. Gross revenue in 2016 is projected at $762 per acre, $3 per acre higher than gross revenue in 2015. Costs are projected at $729 per acre in 2016, $32 per acre lower than the $762 of gross revenue. This suggests positive returns of $32 per acre in 2016, which is higher than the -$19 return for 2015. While positive, returns for 2016 are relatively low.”
Fig 3 – farmdoc