By Nick Paulson and Gary Schnitkey et.al
Illinois crop budgets for 2025 have been revised from their initial release in September (farmdoc daily, September, 24, 2024). Based on recent futures market activity, the 2025 corn price has been increased to $4.30 per bushel while the soybean price has been reduced to $10.20. This marginally improves projected corn returns, while projected soybean returns have declined slightly. Return projections remain negative for corn and soybeans across all regions of Illinois for 2025.
Projections for the 2024 crop year have also been revised with updated corn and soybean price projections and minor yield updates, and to reflect estimated economic assistance payments from the American Relief Act of 2025 (farmdoc daily, January 7, 2025). The estimated economic assistance payments increase 2024 revenues by $43 per acre for corn and $30 for soybeans.
Updated 2025 Budgets
Updates for corn, soybeans, wheat, and double-crop soybean budgets are provided in the 2025 Crop Budgets publication in the Management section of farmdoc. Budgets are provided for northern, central, and southern Illinois regions, with the central region broken out into high-productivity and low-productivity farmland.
The updates to 2025 budgets and 2024 projections are also incorporated into a January 2025 revision of the Revenue and Costs for Illinois Grain Crops publication which reports average yearly revenues, costs, and returns from producing corn, soybeans, wheat, and double-crop soybeans by region of Illinois. The historical figures from 2018 through 2023 are based on farms enrolled in Illinois Farm Business Farm Management (FBFM), while farmdoc projections are provided for the 2024 and 2025 crop years.
Table 1 summarizes the revised 2025 budgets for corn and soybeans across all four Illinois regions. Compared with the initial release in September, the revised budgets use a $4.30 corn price (increase of $0.05 from $4.25) and a $10.20 soybean price (reduction of $0.05 from $10.25). The price revisions reflect recent futures market activity for contracts during the 2025 marketing year period adjusting for average historical basis levels.
The price adjustments improve return projections for corn by $10-15 per acre, while soybean return projections have declined by $3-4 per acre compared with the initial September release. Projected yields remain at trend levels for each region. No notable cost adjustments were made.
Break-even prices to cover nonland costs remain in the range of $3.17 to $3.66 per bushel for corn and $6.53 to $8.38 per bushel for soybeans to cover non-land costs. Break-even prices to cover total costs (non-land plus average cash rent) range from $4.60 to $4.66 for corn and $11.01 to $11.56 for soybeans.
Projected corn and soybean returns are relatively similar across all regions, suggesting no significant departures from historical crop rotations should be expected for 2025. Corn minus soybean returns range from -$15 per acre in northern Illinois to $13 per acre in southern Illinois.
Revised Projections for 2024
Revisions to 2024 projections resulted in larger adjustments in returns. 2024 projections now incorporate estimates for economic assistance payments that will be received early this year through the American Relief Act of 2025 (farmdoc daily, January 7, 2025). Economic assistance payments added $43 per acre to corn revenue and $30 per acre for soybean revenue. Those changes have similar impacts on returns for the two crops.
Smaller changes were made to yields and prices. While yields remain above trend levels, projected corn yields were adjusted down 1 bushel per acre reflecting downward revisions in Illinois yield estimates from the USDA this fall and in the most recent January Crop Production annual summary report from the National Agriculture Statistics Service (NASS). The 2024 corn price was increased from $4.10 to $4.25 while the soybean price was lowered from $10.50 to $10.20 reflecting market prices and USDA projections for 2024 marketing year average prices in the January WASDE report.
The revised figures for 2024 result in improved returns for corn and soybeans Illinois. Table 2 reports the updated projections for corn and soybean revenues, costs, and returns in 2024 and 2025 for central Illinois (high-productivity farmland), along with historical figures for 2023. Projected returns to corn in 2024 improved by $98 per acre compared with the September projections, while projected returns to soybeans improved by $7 per acre. However, return projections remain negative for 2024 and 2025 following large negative returns in 2023.
Summary
Better price prospects for corn over recent months plus the economic assistance (EA) payments for 2024 have resulted in improved return projections for corn in 2024 and 2025. Continued weakness in soybean markets have resulted in slightly lower return projections for 2025 while 2024 prospects have improved overall due to the ad hoc support payments.
While return projections have improved, historically large negative returns to corn and soybeans on cash rented land in Illinois are expected to persist into 2025. If this occurs, it would mark three consecutive years of negative returns (see Figure 1) and significant erosion of the strong financial position Illinois grain farms achieved, on average, following the high income years from 2020 to 2022 (farmdoc daily, October 18, 2024).
While the ad hoc support for 2024 will help to partially offset losses in the short-term, current commodity price levels remain below what is needed to cover total production costs for the majority of producers whose operations rely on a meaningful amount of cash rented farmland. Further price improvements and/or cost adjustments will be needed to bring return prospects back in line with historical levels.
Acknowledgment
The authors would like to acknowledge that data used in this study comes from the Illinois Farm Business Farm Management (FBFM) Association. Without Illinois FBFM, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,000+ farmers and 70 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff provide on-farm counsel along with recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact our office located on the campus of the University of Illinois in the Department of Agricultural and Consumer Economics at 217-333-8346 or visit the FBFM website at www.fbfm.org.