Corn prices combined with high yield means farm incomes will be lower this year.
In a report issued by Gary Schnitkey, University of Illinois, data shows that 2014 grain farm incomes will be much lower than in 2013. The combination of corn prices at about $4.20 per bushel, along with above average yields, are causing the lower income projections. The $4.20 corn price projected for 2014 is below the $4.65 price for the 2013 crop. Similarly the $10.75 soybean price projected for 2014 is below the $13.25 price for the 2013 crop.
2014 net incomes are projected under the following scenario:
- Costs are taken in 2014 budgets (see here). Non-land costs are projected slightly lower in 2014 as compared to 2013.
- Yields are projected at 10 bushels per acre higher for corn in 2014 than in 2013. Soybean yields for soybeans are projected 3 bushel per acre higher than 2013 yields. This yield scenario is for an above average yielding year, certainly within the prospects given weather up to this point. However, yields are far from certain. Hot, dry weather during the upcoming critical yield-determination weeks, or other adverse events, could result in much lower yields.
- Corn and soybean prices are projected at the midpoint of the WASDE range: $4.20 per bushel for corn and $10.75 per bushel for soybeans.
Given this scenario, average net income are projected at $45,000 per farm, considerably below any average income level since 2006.
Corn prices in the low $4.00 range likely will result in incomes below $50,000. Corn prices in the high $4.00 range will result in average incomes above $100,000. If corn prices average around $4.50 over the next several years, average incomes likely will be in the above range for the next several years. Lower incomes are possible with corn prices below $4.00 per bushel.
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