Gary Schnitkey

MFP payments for 2020 are not known but could make a big difference on 2020 returns. Consider building bonuses for MFPs in 2020 cash rents YouTube video at: youtu.be/1QGTiWlfzVU Article at: farmdocdaily.illinois.edu/20… – at Urbana, IL

Projections of 2019 and 2020 farm incomes on Illinois grain farms: youtu.be/Cv_cQAdz_Ow Either need exceptional yields or another round of MFP in 2020 to get to $0 per farm, given current trade environment. – at CHAMPAIGN&SPRNGFLD-DECATUR

Debt per acre rose slightly at the end of 2017 on Illinois FBFM farms. Debt-to-asset ratio increased as well. Debt per acre has been rising in most years since 1991. In recent years, asset values have not been growing to counter debt increase farmdocdaily.illinois.edu/20… – at CHAMPAIGN&SPRNGFLD-DECATUR

Cash rent levels for 2019 $9.00 soybean price and cost increases lead to need for large cash rent decreases for farmer profitability — $50 or more decline from average levels. Less than $200 per acre rent for 207 bu expected corn / 67 bu soybean yields. farmdocdaily.illinois.edu/20…

Arguably, trade disputes have lowered chances of higher corn and soybean prices in the future, suggests that need to evaluate long-run farmland returns when setting rents farmdocdaily.illinois.edu/20… – at Urbana, IL

Working capital on grain farms again declined in 2017. Cash still has not stabilized farmdocdaily.illinois.edu/20… – at CHAMPAIGN&SPRNGFLD-DECATUR

Corn likley to shift to PLC from ARC-CO if either the House or Senate versions of 2018 Farm Bill pass. For corn, expected payments higher for PLC than ARC. farmdocdaily.illinois.edu/20… – at CHAMPAIGN&SPRNGFLD-DECATUR

2018 Soybean Crop Insurance Youtube. Implications: 1. Insurance payments could be large but still not likely. 2. If payments are large, grain farm incomes will be low. 3. Insurance payments will not compensate farmers for trade disruptions. youtube.com/watch?v=O4Kxtot2… – at CHAMPAIGN&SPRNGFLD-DECATUR

In previous post got a year ahead. Corrected 2019 to 2018 after catch by @croninjm Soybean RP payments in 2018: yield losses are still needed at current November CME soybean price levels. – at CHAMPAIGN&SPRNGFLD-DECATUR

Corn RP payments Dec 2018 CME contract near $3.68, which is .92 of $3.96 projected price. There would have to be yield loss to get a payment. – at CHAMPAIGN&SPRNGFLD-DECATUR

Soybeans Revenue Protection (RP) crop insurance payments: Right now, Nov 2018 contract near $8.66. Current price is .852 of $10.16 projected price. Need a yield loss for a payment. – at CHAMPAIGN&SPRNGFLD-DECATUR

The current level of the Nov 2018 soybean contract ($8.65) would not trigger 2018 RP crop insurance payments at any coverage level without yield loss. At this point, I am not expecting large soybean crop insurance payments. farmdocdaily.illinois.edu/20… – at CHAMPAIGN&SPRNGFLD-DECATUR

Meeting these three items could result in 2018 grain farm incomes being near 2016-17 averages (not particularly good): 1. Gains on grain produce in 2017 and sold in 2018. 2. Pricing over 25% of 2018 crop in first half of 2018 3. Exceptional yields farmdocdaily.illinois.edu/20… – at Shackle Island, TN

From 2014 highs to 2017, the largest declines in corn production costs came from fertilizer, drying, and fuel. These costs are highly related to energy prices, which are increasing. Higher energy prices likely mean higher corn production costs in 2019 farmdocdaily.illinois.edu/20… – at Urbana, IL

Per acre pesticide costs on corn in central Illinois increased dramatically from $50/acre in 2012 to mid-$60/acre in 2013 to 2016. All time high of $73/acre in 2017. farmdocdaily.illinois.edu/20…

In Illinois, soybean yields have been exceptional recently, but not changed much relative to corn. Bean yields may be catching up with corn. – at CHAMPAIGN&SPRNGFLD-DECATUR

In 2017, central Illinois trend corn yield (200 bu/acre) and $ 3.70 price gets ~$80 less in revenue compared to 16.

2016 state soybean yields All of Midwest had yields above trend. Only New York and Alabama below trend

2016 state corn yields. Illinois yld 25 bushels above trend. Most Midwest states have above trend yields. Mid-Atlantic seaboard good also

Average 2016 cash rents by expected corn yield farmdocdaily.illinois.edu/20…