April 20, 2018

Cost to Produce Corn and Soybeans in Illinois - 2017

In 2017, the total of all economic costs per acre for growing corn in Illinois averaged $876 in the northern section, $868 in the central section for farmland with "high" soil ratings, $845 in the central section for farmland with "low" soil ratings, and $806 in the southern section. Soybean costs per acre were $636, $655, $609 and $616, respectively (see Table 1). Costs were lower in southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $3.82 to $4.77 for corn and from $9.63 to $11.41 for soybeans. Variations in this cost were related to weather, yields, and land quality.

  • Authors: Brandy Krapf, Dwight Raab, and Bradley Zwilling
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April 19, 2018

How Many Days Does It Take to Plant the U.S. Corn Crop?

Corn planting progress in the U.S. is always a staple of market conversations this time of year. The cold and wet conditions (snow!) in the Corn Belt during the first half of April have severely limited fieldwork and corn planting. Naturally, there is great interest in what this implies for the timeliness of planting the 2018 corn crop in the U.S. Whether present conditions translate into substantial planting delays depends critically on the rate that corn planting can proceed once conditions improve. There has undoubtedly been substantial investment in large and technically sophisticated corn planters during the last decade. In addition, GPS auto-steer systems make it feasible to operate planters for more hours per day. As a result, it is not uncommon to hear the refrain that the entire Corn Belt can be planted in five good field days. The purpose of this article is to estimate the minimum number of suitable field days required to plant the U.S. corn crop based on historical planting progress data. Our work builds upon the analysis of issues related to the timeliness of corn planting in several previous farmdoc daily articles.

  • Authors: Scott Irwin and Todd Hubbs
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April 18, 2018

A Looming Trade War - An Illinois Ag Perspective

China and the threat of a possible U.S. trade war with the nation have dominated global headlines in recent months. Concerns are that if the world's two largest economies come to blows, there will be a ripple effect that is felt across the entire world economy. This most recent increase in the dispute with China isn't something new, as the U.S. and China have had long-standing issues with each other when it comes to trade and trade practices. However, the last several months have seen matters ramp up to a potential trade war, with hundreds of billions of dollars in tariffs being proposed.

  • Authors: Steve Burak, Kathy Baylis, Jonathan Coppess and Qianting Xie
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April 17, 2018

Impacts of Chinese Soybean Tariffs on Financial Position of Central Illinois Grain Farms

Recent events suggest a possibility that China will place a 25% tariff on soybean exports from the United States to China. Such a tariff would result in lower soybean prices and have numerous price and cost effects. We evaluate these impacts on the 2018-2021 financial performance of an average 1,700 acre grain farm located in central Illinois. Our analysis indicates a 25% tariff would result in a significant deterioration in cash flow. An attendant 20% farmland price decline would result in over a $500,000 decline in the farm's net worth by 2021.

  • Authors: Krista Swanson, Gary Schnitkey, Todd Hubbs, Jonathan Coppess, Nick Paulson, and Carl Zulauf
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April 16, 2018

Weekly Outlook: Too Early to Worry About Corn Acreage?

Recent unseasonably cold and wet weather over much of the Corn Belt precipitates speculation into the prospect of reduced corn acreage this year. With March Prospective Plantings at 88 million acres, a reduction in corn acreage under the recent strong demand levels for corn creates a supportive scenario for corn prices moving forward.