Average net income on Illinois grain farms is projected at $20,000, dramatically lower than the $104,000 average last year. “At current projections of commodity prices, net incomes in 2016 likely will be low as well,” writes U-Illinois economist Gary Schnitkey at farmdoc daily. The outlook for income this year and next is similar to 1998-2002, “the last time very low incomes occurred in agriculture,” he said. Like now, commodity prices were low in 1998-2002.
“At this point, commodity prices for 2016 are projected to be below $4.00 (a bushel) for corn and $9.00 for soybeans. These commodity prices will result in low incomes. Cost cutting will be a key factor determining 2016 incomes,” said Schnitkey. “Grain farms likely will have low incomes for several years.”
The USDA plans to release today its projections of crop and livestock production, consumption and prices for the next decade. The long-term projections are based on conditions as of November.