Significant decline likely for grain farm income in 2022
After projecting record grain farm income for 2021, ag economists at the University of Illinois say the number will likely take a significant decline in 2022.
Gary Schnitkey outlines three corn and soybean price scenarios factoring in current fall bids for 2022 crops, higher input costs and assuming trend line yields next year. He says an optimistic scenario would be $5 corn and $12 soybeans leading to a $130,000 net farm income.
“It would be above the average from 2014-2019 when we had $75,000-$80,000 worth of income, but a $5 corn price and $12 soybean price, which would be very high compared to recent years, would be needed to get there.”
If you based the projection off USDA’s 2022 price estimates of $4.80 corn and $10.50 soybeans, Schnitkey says net farm income would drop to $57,000.
“They are projecting a much lower soybean price than current market averages. That is why if you are thinking about planting more soybeans, you might want to hedge those soybeans right now.”
And Schnitkey says if prices drop to the 2015-2019 averages of $4 corn and $10.00 soybeans it would put 2022 farm income at negative $65,000.
“If we go back there, that is not a good scenario. And there would be cost reductions associated with that.”
The USDA will release their first 2022 farm income projection in February.