For the first time since 2015, Midwestern farmers face negative returns from corn and soybeans grown on rented land, three agricultural economists said Tuesday at the farmdoc daily blog. They estimated a loss of $99 an acre for corn and $13 an acre on soybeans, based on rising production costs and a downturn in market prices.
“Much remains to be seen” as to crop revenue this year, wrote Gary Schnitkey and Nick Paulson of the University of Illinois and Carl Zulauf of Ohio State University. Commodity prices could improve and there is the possibility of federal aid to alleviate low returns. “Even if low and negative returns do occur, significant financial stress likely will not result on most farms. Over the past several years, farmers generally have built financial reserves. Those financial reserves can now be used to mitigate low returns associated with 2023 production.”
In crop budgets for corn and soybeans on high-productivity land, the economists assumed market prices of $5 a bushel for corn and $12.30 a bushel for soybeans, down from the season-average price for 2022 crops. Fertilizer, pesticide, seed, fuel and equipment costs are higher this year than last, they said. “Operator and land return for corn is projected at $264 per acre in 2023, down $434 per acre from the $698 return in 2022. The operator and land return of $350 per acre for soybeans is down by $170 from the $520 return in 2022.”
Correction: this post corrects figure for loss per acre on soybeans, from loss per bushel.