Budgeting with Low Grain Prices

Feb 19, 2024

By Jim Kemink, Vice President - Agronomy

With the drop in corn and soybean prices from last year it is very tempting and sometimes necessary to cut back on inputs in response to declining revenues. This, however, often becomes a double-edged sword. While saving money you might be costing yourself significant income. The best planning you can do is use a budget spreadsheet to find out what a bushel of corn actually costs to produce on your farm. Having this information is the best way to make decisions on inputs and also knowing your profit level when marketing your crop!

While many spreadsheets are available online your United Cooperative agronomist has at his disposal a very comprehensive Budget worksheet to figure out what exactly your cost of production is. In the scenario below with a modest fertilizer and crop protection program using a fungicide and a land value of $200 it cost $4.19/bushel to raise 200 bushel per acre. If you were to cut $50 in inputs it would lower that number by $.25/bushel or $3.94/bushel. However, if yields drop to 185bu/acre after your cuts your cost per bushel actually goes up to $4.26 even with the lower input cost.
The message is to be careful what you cut. If corn price goes up in the marketing year it would even be more costly to have lower yields. Work it through with your UC agronomist and get your breakeven number figured out.

Read More News

Jul 10, 2024
One of the considerations you may approach differently this year is fungicide applications. When deciding which acres to spray and which products to use, response-to fungicide (RTF) scores can help you make tailored, hybrid-specific choices based on years of reliable yield data.
Jul 08, 2024
In several areas, Tar Spot has wreaked havoc with corn yield this year as it did in the southwest and the other regions of southern Wisconsin in 2018. Yield reductions can be very severe, with yield reductions up to 100 bushels per acre if Tar Spot hits early and corn doesnt black layer! 20–40-bushel losses are not uncommon where corn is highly infected. Tar Spot is a fungal disease that causes black specks that look like tar splashes on the corn leaves. While being a relatively new corn disease in the United States, growers in South America have dealt with it for years. It most likely moved to the U.S. by windblown spores from tropical storms as far back as 2015.       
Jun 11, 2024
Nitrogen is the most heavily managed nutrient in corn production systems, but like every other essential plant element, it does not act alone. For example, the chlorophyll molecule that is critical for photosynthesis contains 4 nitrogen ions, and sulfur is a key element (along with several others) involved in the formation of chlorophyll so if the plant does not have adequate sulfur the formation of chlorophyll may slow, and/or become less efficient, which is not something any crop producer should want.

Related Topics