All production costs driving near-record breakeven costs for crops in ‘22
Producers are facing near-record breakeven prices for 2022 and a farm economist says fertilizer is the main culprit.
“Projecting those costs on a per acre basis to double between this year and next year.”
Gary Schnitkey is with the University of Illinois and says cost of production is moving higher. “It’s led by fertilizer and every other cost has gone up and you can attribute that to inflation (and) supply chain disruptions caused by COVID-19.”
He tells Brownfield the breakeven price for corn is $4.73 per bushel and $11.06 for soybeans – the highest since 2012.
Schnitkey says volatility in the commodity market may not support high production costs throughout the next growing season. “If you’re looking at fall delivery bids now, they are above our breakeven levels so marking more than usual – and I’m not saying all – but more than usual would probably be a good thing this year instead of taking a wait and see attitude.”
He says USDA is projecting corn prices at $4 per bushel and beans at $10 per bushel next year but it’s unlikely there will be cost adjustments, which presents higher levels of risk.
Gary Schnitkey with the University of Illinois: