Grain prices look favorable for breakeven or higher
An ag economics professor says despite record high input costs, commodity prices are still at a spot for grain farmers to at least break even in 2022.
Paul Stoddard with the University of Illinois tells Brownfield the spike in input costs per acre this year is a top concern for farmers, as it should be.
“Leaving land out of it and looking at seed, fertilizer, chemicals etc., the price to grow corn per acre has gone up by about 30% and beans have gone up by about that same amount. So there has been a tremendous increase in the cost of inputs which leads to a compression of margins because there just aren’t enough dollars to go around sometimes.”
But he says the other piece of the puzzle is relatively high grain prices.
“Our department projects that the breakeven price for corn is $4.73 and for beans it is $11.06. Current fall ’22 prices that are being offered at the elevators are substantially better than both of those, so there is an opportunity to lock in some profitable sale prices now.”
Current new crop futures prices are more than $1 above breakeven for corn and more than $3 higher for soybeans.
Brownfield interviewed Stoddard during the Farm Credit Illinois FreshRoots Forum, where he was a keynote presenter to beginning farmers.