The typical Midwestern grain farm could generate more than twice as much income this year as in 2019, thanks to higher market prices and large federal payments, said two University of Illinois analysts. The outlook for the new year is much more dour, especially without new stopgap payments.
During a webinar, economist Gary Schnitkey and research associate Dale Lattz said corn and soybean growers could see returns drop to money-losing levels in 2021 with average yields, modestly lower prices and the end of coronavirus payments. With above-average yields and strong commodity prices, growers could see an average return of $30 an acre without special federal payments or a higher $55 an acre if there are bailout payments worth half as much as this year.
For this year, grain farmers would see gross incomes that are similar to the those during the commodity boom of 2006-13. Next year could be similar to 2018 or 2019, when revenue was more constrained and federal supports were important, said Schnitkey.
On one of the slides on the webinar, they wrote, “Sufficient 2021 incomes will be dependent on a combination of above-trend and continued federal payments. Risk management will be critical.”
To watch the webinar, click here.