Corn may be more profitable than soybeans in 2019, but that isn’t saying much about the outlook for midwestern farmers, say economists Gary Schnitkey and Krista Swanson of the University of Illinois. “Projected returns for 2019 are very low,” they write at the farmdoc Daily blog. “Extreme caution seems the order of the day.”
Crop returns for corn and soybeans would range from $100 to $197 an acre on highly productive farmland under a range of scenarios that Schnitkey and Swanson constructed using various yields, prices, and costs. But those numbers are below farmland rental rates. “While there is hope for a brightened outlook, current budgets indicate losses on rented land in 2019. Incomes in 2018 could be reasonable given exceptional yields and Market Facilitation Program payments.”
The prudent course is to save money from this year’s crops and reduce spending, say the economists. “Consider all possible options for lowering cash rents and moving to variable cash rents. … Again, prices hopefully will improve [in 2019], thereby brightening a bleak situation.”