Agronomy: Farmland Cash Rent Challenges
What do the near-term economics look like for crops in 2015? What is a farmer or a landowner to do? To begin to answer that question, we need to look at farmer finances. There is no doubt that farmer profits have been declining from 2013 to the present. 2013 resulted in overall grain farm profits in Illinois being less than half of the results in 2011 and 2012. Still, 2013 was the sixth most profitable year on record for Illinois producers. Profits in 2014 were likely lower than in 2013, but are still being tabulated. Land values have fallen back a little since, [...]
Agronomy: Trying to Guarantee Profitability
Commodity prices are low and the outlook for significant increases is dim. So remaining profitable is the challenge growers will face in 2015. In the long run, you cannot operate an enterprise at a loss. It wasn’t that long ago (pre-ethanol), that we always hoped for making a profit, but it wasn’t guaranteed. In 2015, a Central Illinois producer looking back through time at prices and yields will realize that they will likely have about a 1 in 5 chance of losing money in a share lease and a more significant chance of doing so with higher cash rents. [...]
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