This article was originally published on the farmdoc Daily website by Dale Lattz and Bradley Zwilling. In 2019, the total of all economic costs per acre for growing corn in Illinois averaged $878 in the northern section, $912 in the central section for farmland with “high” soil ratings, $887 in the central section for farmland with “low” soil ratings, and $851 in the southern section.  Soybean costs per acre were $630, $672, $629 and $652, respectively (see Table 1).  Costs were lower in southern Illinois primarily because of lower land costs.  The total of all economic costs per bushel [...]

It is no secret that agriculture faces many head winds in 2020. The effects of COVID-19, large carryover forecasts, continually evolving trade relationships and a volatile oil market shape supply and demand for key commodities—like soybeans—on a daily basis. For the foreseeable future soybean prices are expected to be less than $9 per bushel, causing many growers to re-evaluate their crop budgets and input decisions that will affect yield and profitability in 2020. Let us consider a few factors for making profitable agronomic management decisions this season: When can soybean yields be affected most by crop management decisions? Everything [...]

By Jessie Shoopman and Emily Carls What? What is budgeting? More specifically, what is budgeting for business management? Budgeting can be defined as the process of designing, implementing and operating budgets. Budgets can be used in a variety of ways when talking about agriculture production: cash flow analysis, capital purchase management, enterprise analysis, long-range strategic planning, etc. Why? Why is budgeting important? The variability of the agriculture industry has increased over the last decade. When we look at the marketing year average (MYA) price for soybeans over the last 10 years (2009-2018), we see drastic changes year over year. [...]

By Emily Carls and Jessie Shoopman The two most common topics of producers are weather and prices. Both are vital to the success of an operation, but are also the most unpredictable part of a farming operation. Knowing the right time to sell grain and how much to sell can be stressful and frustrating. One way to minimize the risk in marketing grain is to know your breakeven price, or the price needed to generate enough revenue to cover all of the costs of production. Knowing your breakeven can help take some of the emotion out of marketing grain. [...]

When I’m successful both in and out of the field, my business thrives. While improving on-farm practices helps me achieve high yield acres, that’s not the only way I can increase profitability. My business succeeds when I commit to continual learning. That’s true for all growers. When we make smart decisions, whether that’s adopting new technology or reading up on management tips, we accelerate success. But I realize that our marketplace is always evolving. It can be difficult enough to stay on top of changing production practices, let alone best practices for business. To help growers like you and [...]

The 2020 crop insurance deadline of March 15th is quickly approaching. Before this date, a producer needs to declare the type of policy they would like to purchase or update policy option from last year. Recently, the spring 2020 price was set for soybeans at $9.17, a reduction from the 2019 spring price of $9.54. Crop insurance is a federal program to help protect a percentage of a farmer’s financial investment. As you can see from the chart on the right, projected protected income for 2020 is less than 2019. Based off these figures, a producer can build a [...]

This article was originally published on the farmdoc daily website.  This article examines working capital to value of farm production for selected producer characteristics.  Working capital to Value of Farm production is one of the traditional measures of liquidity suggested by the Farm Financial Standards Council (FFSC), with others being current ratio and working capital. Overall, working capital to value of farm production has declined since 2013. Background The Financial Guidelines for Agriculture developed by the Farm Financial Standards Council (FFSC) identified five general financial measures when evaluating the financial performance of the farm firm.  These include liquidity, solvency, [...]

At the top of most Americans’ New Year’s resolutions are things like eating healthier, exercising more and losing weight. Being health-conscious coming into the new year is a great way to get started on the right foot. But beyond physical health, it’s also a great idea to place the health of your finances, business and crop management practices on your resolution list, too. We start each year with an idea of what we hope to achieve and how we want our businesses to operate. Although we can’t predict every factor that will affect our farms, we can start the [...]