By David Bau, Extension Educator
For the past few years corn and soybean prices have risen and fallen deeply. Current corn price starts with a 2 in front, something not seen since 2006 as indicated on Table 1 below. While 2016 soybean prices start with an 8 something not experienced since 2007. Prices started in 2005 with an average soybean price of $5.80 and an average corn price of $1.68. These prices increased significantly to a high for soybeans in 2013 at $13.99 and $6.83 for corn in 2012. With soybean price more than doubling and corn prices quadrupling. In 2015 soybeans prices are almost $5.00 off the high and corn is over $3.00 less per bushel a dramatic and quick change.
Table 1. Worthington Average Cash Prices for Corn and Soybeans
Meanwhile, during this same time frame, soybean input costs increased from $267.36 per acre on average in southern Minnesota to a high in 2014 of $538.91 per acre in Table 2. These figures are from the farmers records in the adult farm management programs reported in the FINBIN data base. If you divide these costs by the average yields you determine the cost per bushel listed in the third column. Even with record corn yields in 2015 the cost per bushel was $3.83 per bushel produced compared with an average cash price of $3.48 as difference of 35ȼ or a loss of $71.61 per acre on average. Soybeans fared better with an average cost per bushel of $8.66 in 2015 with the average price at $9.06 or a potential profit of 40ȼ per bushel or $23.76 per acre.
From 2005 through 2015, soybean costs per bushel have averaged $8.33 while corn input costs average $3.63, while average prices were $10.17 soybeans and $4.21 for corn, a difference of $1.84 per bushel for soybeans and 58ȼ per bushel for corn. Using 50 bushels for soybeans and 180 bushels for corn, the average profit per acre would translate to $92 per acre for soybeans and $104.40 for corn.
Farmers don’t always receive the average price for soybean and corn which has an impact on these profit figures. Input costs declined for the first time in 2015 and with 2016 and 2017 cash corn prices below the 2015 cost per bushel of $3.83 farmers will have to look for ways to lower input costs. The largest costs are rent, fertilizer and seed. For soybeans average input costs are at or slightly below current 2016 and 2017 cash prices, but in order to make a profit they will also need to examine input costs with rent, seed, fertilizer and chemicals as the top input costs.
Table 2. Southern Minnesota Soybean & Corn Average Yields, Input Costs and Cost Per Bushel
Farmers need to determine their own costs and develop a marketing plan that will market their crops if and when prices reach levels that will cover their input costs and make a profit.