Corn and soybean growers may see negative returns on their crops for the first time since 2000, estimates economist Gary Schnitkey of U-Illinois. At farmdoc daily, Schnitkey computes likely crop revenue and production costs for a typical farm in central Illinois with higher-yielding land. “Farmer returns have come down from high levels in 2012 to lower levels in 2013, to (projected) negative levels in 2014,” he says. For corn, returns would drop from $341 an acre in 2012 to a negative $48 this year. Soybean returns would drop to a negative $52 an acre this year from $160 in 2012..
“Negative returns became a higher probability after the June 30th reports,” Schnitkey said, referring to USDA reports showing corn and soybean stockpiles were larger than expected and robust plantings of corn and soybeans for harvest this fall. Large supplies would push down prices and further impair returns. High yields will offset lower prices to some extent but USDA has forecast a decline of more than 20 percent in farm income.