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 Remember, these highly
variable years will build “averages” for climate. Excess rainfall
hit portions of the county at times, while other areas, particularly
the northern portions, could smell the rain, but little fell on the
fields. Even general areas of the county with abundant rainfall had
pockets get missed by the extremely spotty nature of the rains.
Harvest continues to wind down. Weather and storage space problems
have both slowed the tail end of the harvest. Yes, abundant yields
are always what is hoped for, but they have taxed the handling and
storage capacity of commercial and private facilities. Central
Illinois jumped on harvest early, then some rains came our way. Too
late for most crops to benefit, but putting a halt to soybean
harvest for an extended period.
What does the farm economy look like in our area? It may not be all
roses, but looks to be brighter than some other areas of the
country. The 2018 crop budgets developed by Gary Schnitkey at the
University of Illinois showed corn after soybean acres showing a net
of $215 per acre for land cost and operator returns. This figured a
yield of 208 bushels and a $3.60 price. The yield is probably there
or slightly exceeded, but price is closer to $3.40 for fall.
If you follow cash rents, an average of $215 doesn’t cut it in our
area. Then there is family living expense to account for out of the
bottom line as well. The average from Farm Business Farm Management
records in 2017 was almost $80,000 per family for the State of
Illinois.
The 2019 numbers really don’t improve for corn or soybeans.
We anticipated more soybean acres based on pre-season budgets
showing a net of $270 per acre, using a yield of 63 and a price of
$9.60 per bushel. Yields have exceeded the estimate in many cases,
however the price is under $8.00 per bushel. Political uncertainties
have had an impact on the prices, but have really taken a toll on
soybeans. The North American Free Trade Agreement has now been
replaced with a new agreement, but uncertainties in markets are
usually not a good thing. The trade negotiations with other areas of
the world continue, and a quick resolution would certainly be
helpful to commodities including soybeans.
Given the expectations of a tight farm economy, where does the money
come from to make things flow? Simply, it is much like any family
budget. Additional money is borrowed, some expenses are cut, savings
are dipped into, off-farm employment or specialty enterprises are
undertaken to provide income and benefits, or there are some royalty
producing incomes sought.
The trend has been toward at least some off-farm employment for the
family for many years now. Add in the energy boom in the area with
wind power and now solar coming to the area, some additional royalty
income is being pumped into the farm and government budgets.
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Specialty enterprises include
small-scale additional crops, specialty grains and seed production,
non-GMO crops, and livestock operations, all contribute to these
additional enterprises.
Some additional assistance will come through limited direct payments
for market disruption.
Another factor for corn is the proposed increase in ethanol content
in gasoline from 10% to 15%. The production side of the equation is
hopefully offset by the use side, and innovative ways to use more
commodities is essential to the farm economy.
Farmers are extremely resourceful, and many are finding ways to
effectively deal with declining incomes or outright losses. The
production side has been operating at a high level of efficiency,
and we certainly hope the weather cooperates too.
The marketing side has offered opportunities through the year for a
greatly increased income, and hopefully many took advantage of the
opportunities when they presented themselves. Stability in markets
will allow for better planning by producers, processors, and
consumers. We can all add stability and prosperity to our wish list
for the coming year!
Enjoy the fall weather, and be safe on the roads.
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