"Lower 2009 returns are caused by higher input costs and declining
commodity prices," said Gary Schnitkey, U of I economist. "In 2009,
non-land costs for corn are projected at $517 per acre, $89 higher
than the 2008 non-land costs of $428 per acre. On the commodity
price side, farmers received an average of $4.05 per bushel for corn
in 2008. It's expected that they will receive $3.25 per bushel for
corn in 2009."
The projections are based on crop budgets from the Farm Business
Farm Management System, yield estimates from National Agricultural
Statistical Service and revised commodity price projections.
Based on estimates released by the National Agricultural
Statistical Service, 2009 yields are projected at 200 bushels per
acre for corn and 51 bushels per acre for soybeans. These yield
estimates are slightly above 2008 yields of 199 bushels for corn and
50 bushels for soybeans.
The 200-bushel expected 2009 yield is above the five-year average
yield of 188 bushels per acre. The 51-bushel expected 2009 yield for
soybeans is below the five-year average of 54 bushels per acre.
Returns in 2009 include an ACRE payment on corn of $25 per acre.
This $25 payment represents an average payment across acres enrolled
and not enrolled in ACRE. ACRE payments, based on a $3.25
season-average price, are projected above the $25 per acre payment
for farms enrolled in ACRE and would be in the $60 per acre range.
The 2009 returns could vary from the above projections. At this
point, changes in commodity prices have the most potential to change
returns. Increases in corn and soybean prices will increase returns,
while declines in prices will reduce returns.
"An individual farm can have large variance from these averages
because of yield, price or cost differences from the averages. In
2009, there will be sizable variations in non-land costs across
farms, as fertilizer prices varied greatly between the fall and the
spring. Timing of purchase will have a large impact on non-land
costs," Schnitkey said.
FBFM budgets also showed that in 2008, cash rent in central
Illinois averaged $197 per acre for high-productivity farmland. Cash
rent is projected at $210 per acre for 2009.
"These 2009 returns indicate that farms will likely face
financial stress. However, returns in 2007 and 2008 were above
average and many farmers built financial reserves that will carry
them through the low income year of 2009, and I don't expect
widespread financial difficulties across grain farms in the Corn
Belt," said Schnitkey.
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He projected that net operator returns for 2010 will rise from 2009
levels to $94 per acre for corn and $84 per acre for soybeans.
"The higher 2010 returns are based on lower non-land costs.
Non-land costs for corn are projected at $440 per acre in 2010, down
by $77 per acre from 2009 non-land costs of $517 per acre.
"Much of the decline in non-land costs is due to lower fertilizer
prices. Fertilizer prices used for 2010 projections are $400 per ton
for anhydrous ammonia, $400 per ton for DAP and $600 per ton for
potash. By way of comparison, anhydrous ammonia prices were above
$1,000 per ton during the summer of 2008," Schnitkey said.
Budgets for 2010 contain an estimate of $3.75 corn and $10
soybeans. Currently, these prices are above bids available on
"It's likely that the high returns period experienced during 2007
and 2008 is over and crop farming now faces agricultural returns
closer to historical averages," Schnitkey said.
FBFM, which consists of 5,500-plus farmers and 60 professional
field staff, is a not-for-profit organization available to all farm
operators in Illinois. FBFM field staff provides on-farm counsel
with computerized recordkeeping, farm financial management, business
entity planning and income tax management. For more information,
contact the state FBFM office at the University of Illinois
Department of Agricultural and Consumer Economics at 217-333-5511 or
A copy of the full report with data tables is available at
[Text from file received from
the University of Illinois at