Failure to adequately cover these overhead costs typically puts downward pressure on cash rent and land values. Thus, this model finds the implied non-financial health costs of corn production (see Supplementary Information for details). In 2020, crop revenue is projected at $561 per acre based on a 68 bushel per acre yield and an $8.25 price. Evaluating the holistic costs and benefits of corn production systems in Minnesota, US. Like in a custody battle -- who suffers? This was supplemented by relevant data from scientific literature and various health and environmental reports. The 2022 projected costs exceed 2021 cost of $652 per acre by $124 per acre. The situation was considerably different from 2014 to 2020. The reduced CO2 emissions come from the lack of synthetic N-fertilizer production. The growth in ethanol slowed dramatically in 2013, leading to a slowing in the growth of overall corn use. For 2022, total costs for corn are projected at $1,064 per acre, with $755 in non-land costs and $309 in cash rent. (Food and Agriculture Organization of the United Nations, Rome, 2018). Corn has been grown across Iowa for more than 150 years, nearly 30,000 kernels are planted per acre, and corn yields can be close to 200 bushels per acre in a good year on high CSR land. Stabenow Proposes $20 Billion Farm Bill Solution? Google Scholar. The impact of corn production on health is monetised by equating the change in well-being from a marginal increase in corn production to the change in income required to yield an equivalent change in well-being. Therefore, this study assesses two systems a dominant GM corn production system and organic system that covers a small fraction of the total area under corn in Minnesota, USA. Variable Cost, Overhead Cost, and Gross Revenue per Acre Rotation Soybeans in Indiana. Article Am. Meeting the food demand of increasing human population requires increased production and also a major policy shift in the way food is produced, processed, distributed and consumed1,2,3. Corn ranks first in world grain production, followed by wheat and rice. Trouble with this page? PubMed This increases the importance of carefully scrutinizing input and crop decisions. Fill in the fields below to compare Income Per Acre for your Stine corn hybrid and up to three additional competitors. Table 1 shows a detailed breakdown of revenues for the years from 2018 to 2021. Excessive use of nitrogen fertilizers in corn also contributes to the rising atmospheric levels of nitrous oxide (N2O)18. In the meantime, to ensure continued support, we are displaying the site without styles Interagency Working Group on Social Cost of Greenhouse Gases. Costs for an efficient Western Kentucky farm are estimated in Table 1 on soil that averages 175 bushels of corn and 54 bushels of soybeans per acre. Too Big to Feed. Adv. The average difference in the contribution margin was $38 per acre during the 2007 to 2013 period. January 30 (2017). The projected difference in contribution margins between corn and soybeans for 2021 is $43 per acre. Expected breakeven price in 2021 is $10.55 per bushel. Fertilizer, Seed, Pesticide, and Cash Rent Cost per Acre Rotation Corn in Indiana. }); The 2021 Purdue Crop Cost and Return Guide, which is available for free download from the Center for Commercial Agriculture website (here), gives estimated costs for planting, growing and harvesting a variety of crops, as well as estimated contribution margins and earnings. This article will evaluate the combined effect of the increases in both commodity and input costs, and estimate profitability for the 2022 crop. Organic corn production involves soil fertility management by using crop rotations over a four-year period with soybean, oats, vegetables and pastures. I have heard farmers this winter claim they did not think they would not be able to make a profit this upcoming year. 10(44003), 2015, https://doi.org/10.1088/1748-9326/10/4/044003 (2015). My advice is to check fertilizer prices before making 2022 cropping plans. Was Cheaper Corn Actually More Profitable for Farmers? We have calculated the extent of corn production in an individuals vicinity using satellite data from USDA which does not allow differentiation based on variety, GM vs. non-GM etc., which would require data linking to locational data on individual farms. Bonding is interaction between members of a relatively homogenous group (family or close friends), while bridging refers to the interconnections between heterogeneous groups (agri-businesses, farming groups etc.). Tilman, D. Global environmental impacts of agricultural expansion: The need for sustainable and efficient practices. Herbicide and seed costs are expected to be similar to 2022 levels. Google Scholar. Fertilizer costs in 2023 are expected to be similar to those in 2022, but $137 ($0.73 per bushel) higher than costs in 2021. The return on soybeans fares better at $150 per acre because fertilizer, seed and drying costs for soybeans are projected to be $226 per acre cheaper than for corn. Government programs called Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) can help farmers protect against the risks of weather and prices. Lett. The market value of GM corn is $4.5 billion, and only $31.8 million for organic corn using production data and market prices of 2017. if (typeof sfsi_widget_set == "function") { The expected loss in 2021 for rotation soybeans is $24 per acre. In 2022, the average price of one bushel of corn was around 7.43 U.S. dollars. Research / However, commodity prices will need to remain at historically high levels for profitable crop production to occur. window.addEventListener("sfsi_functions_loaded", function() Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. (Available online at, http://www.ipes-food.org/_img/upload/files/Concentration_FullReport.pdf Accessed: 30th November 2018). Pricing some grain at current levels would be prudent. . Hutchison, W. D. et al. $15.15 Soybeans (elevator) $6.60 Corn (elevator) $0.92-N, $0.56-P, $0.69-K. 1) Potential profitability looks incredible for 2022, even after accounting for the unprecedented increases in input costs. Agricultural price and income policy has been in place in different forms since World War I. Using a novel three-stage wellbeing valuation, analysis of the associations between corn production intensity and subjective measures of general health and wellbeing indicates that the total non-financial health cost associated with GM corn is $427.50 per hectare or $1.3 billion annually. Anthrax cases detected in Minn. for the first time in a decade. Agriculture occupies 38% of land worldwide, its contribution to Gross Domestic Product (GDP) is less than 1% in developed countries and up to 50% in some developing countries6, and it produces sufficient calories to meet the current food demand of human population7. Whether this aid is forthcoming is a good question, particularly after the 2020 election. Organic acreage is less than 1% of the total corn area in the year 2017. By joining this mailing list, you will receive an email when a new publication is released. Sci. For the natural capital impacts of corn, environmental costs associated with production of corn are estimated in this study and do not include environmental costs associated with transport, processing, and consumption. Yield per harvested acre of corn for silage in the U.S. 2001-2022 However, it is important to consider the total contribution of GM corn to the state economy as well as the USA economy. While advancements in technology make producing corn more efficient, there are still commodity markets which must be contended with. Scientific Reports EPA-SAB-08-003. The impacts of nitrate contamination of drinking water can be estimated by the costs of various treatment options and applying a weighted cost function based on the observed adoption of those technologies as a proportion of total treatment25. Farmer returns were $8 per acre in 2018, -$9 in 2019, -$32 in 2020, and -$78 in 2021. There are many vital ways for farmers toincrease corn crop yield, from planting at the best times and scouting your fields for weeds, insects, disease and birds to testing your soil and using appropriate planting depth and row spacing. We use three-stage well-being valuation method (Methodology for Valuing the Agriculture and the wider food-system Related Cost of Health, MARCH)4 to estimate the non-financial health costs of corn production in Minnesota. In recent years, corn profits have been significantly more volatile than years past. We multiply this by a shadow cost of P ($55.43 per kg P) export estimated by the Wisconsin Department of Natural Resources57. Here we report results of the assessment of two diverse types of corn production systems in terms of stocks and flows of four capitals. 13, 7681, https://doi.org/10.1890/140124 (2015). Land costs increased 11%. Bracmort, K. The Renewable Fuel Standard (RFS): An Overview, Congressional Research Service, https://doi.org/R43325 (2018). The Census Data Query Tool (CDQT) is a web based tool that is available to access and download table level data from the Census of Agriculture Volume 1 publication. Wisconsin Department of Natural Resources. Out of this, more than 92% is GM corn. (2014). Break-even price to cover total costs less other revenue. Liu, J. et al. However, no studies quantifying the P export of organic systems were reviewed. sfsi_widget_set(); In terms of highest qualification levels achieved, the majority of rural Minnesotans have a high school qualification, whilst the majority of urban and town dwellers have a Bachelors degree or above. Cambardella, C. A., Delate, K. & Jaynes, D. B. 1, 477485, https://doi.org/10.1038/s41893-018-0138-5 (2018). We used social cost of carbon at $42.55 per MT of CO2e emissions, assuming a 3% discount rate51. GM and hybrid corn are grown primarily for ethanol production, where, Dried Distillers Grains (DDGs) are a by-product used as animal feed for livestock or poultry, and the meat products are consumed by humans. Corn input costs are expected to be $56 per acre higher than last year, putting the squeeze on profit margins despite relatively high corn prices. Greg Halich and Kenny Burdine | March 31st, 2022Driving through the Commonwealth it is clear that spring has arrived and we are seeing signs of pastures growing. Failure to adequately cover these overhead costs typically puts downward pressure on cash rent and land values. Units Nitrogen, $0.83 per pound 167 138.61 177 146.91 187 155.21 Phosphate, $0.75 per pound 63 47.25 69 51.75 77 57.75 Solutions 10, 63-69. The current yield estimates reflect trend yields for Indiana for each crop. In economic terms, these impacts are often known as negative externalities. Customize your results by entering the Stine corn hybrid brand number and competitor names in the blanks provided. Costanza, R. et al. We applied the median values of the social cost functions to the average annual state wide N application to corn in Minnesota35. In industrialised countries, it is mostly used as animal feedstock followed by ethanol and other industrial uses. Article Farmers may wish to begin to prepare for this possibility, making changes in financial structure and cash rents currently. Gross revenue (market revenue plus government payments), variable cost, and overhead cost per acre for rotation soybeans on average productivity level is illustrated in Figure 4. World Bank. GM/hybrid corn is either grown in rotation with soybean or two subsequent corn crops are grown year after year. The contribution margin, obtained by subtracting total variable cost from market revenue, ranges from $219 per acre for continuous corn to $437 per acre for wheat/double-crop soybeans. It is important to note that crop yields have been modified in this years guide. Disability-related accessibility issue? "With corn above $5 per bushel, cash rents will increase," he said. Critical water peaks are during pre-tassle and kernel fill. Corn Following Corn 167 bushels per acre 185 bushels per acre 204 bushels per acre Your Fixed Variable Fixed Variable Fixed Variable Estimate Preharvest Machinery 1/ $28.30 $27.10 $ Seed, Chemical, etc. Figure 1. Here we summarize key outputs in two production systems GM corn and organic corn (Table1). For high-productivity farmland in central Illinois, the break-even price to cover total costs is estimated at $4.73 per bushel. The projected difference in contribution margins between corn and soybeans for 2023 is $71 per acre in favor of rotation soybeans. My guess is that they either did not have a very sharp pencil (possibly no pencil at all), or they were trying to temper profit expectations to keep landlords from raising rents in the upcoming year. In the marketing year for 2019 (September 2019 through August 2020), ethanol use is projected to decline, largely due to reductions in fuel use due to COVID-19 control measures (See Figure 2). If you havent marketed much of your 2022 crop now would be a good time to start getting serious about it. Rev. Variable Cost, Overhead Cost, and Gross Revenue per Acre Rotation Corn in Indiana. These non-communicable diseases have high economic costs to individuals, societies and the governments. The result demonstrates that general health of individuals decreases by 0.67% with corn production in the respective zip code, totalling annual non- financial health costs of corn in Minnesota to $ 1.3 billion. Social capital includes all dimensions of social life, including interactions, networks, norms and trust, amongst members of society44. The guide is updated frequently as grain futures prices change and the costs of inputs, such as seed, fertilizer, pesticides and fuel, fluctuate. Main health risk pathways of corn production are through agri-environmental pollution of air, water and soil, mainly by synthetic fertilizers and herbicides. In 2018, farmer returns for soybeans were $201 per acre, which includes $121 per acre in MFP payments. Click Image to Enlarge Corn Returns Corn in 2019 For 2019, crop revenue for corn is projected at $738 per acre based on a 208 bushel per acre yield and a $3.55 per bushel price. Relatively low crop margins and expected reductions in government payments will adversely impact a farms liquidity position and financial performance. 81, 14081418 (1991). Thank you for visiting nature.com. High input costs in 2022 eat into profits for corn and soybeans Minnesota Pollution Control Agency. Econ. Schnitkey released the University of Illinois crop projections on the Farmdocdaily website here: https://farmdocdaily.illinois.edu/. Scavia, D. Industrial corn farming is ruining our health and polluting our watersheds. Another key challenge of global agriculture is to minimize impacts on environment and human health4,5. conceived the research. Pretty, J. From 2007 to 2013, the contribution margin for rotation corn on average productivity soil was higher than the contribution margin for rotation soybeans. The images or other third party material in this article are included in the articles Creative Commons license, unless indicated otherwise in a credit line to the material. Summing individual revenue components results in gross revenue for corn of $872 per acre. Without additional Federal aid, farmer returns for both corn and soybeans would have been negative in 2019 and 2020. Organic corn was grown in about 160 farms with 11409 hectares (about 0.3% of total area in Minnesota), yielding average of 9.5 MT/ha. The assessment can be used as a source to review wider impacts of the entire corn value chain in order to modify policies and practices. Linda Foreman. It may seem early to think about the relative profitability of corn and soybean production in 2019. In many years, farmers have had significant revenue from commodity title payments (e.g., Agriculture Risk Coverage and Price Loss Coverage), crop insurance, and ad hoc Federal payments. Congressional Research Service. Soybean farmers are expected to benefit from the meat demand growth and the new meat substitute production. Dont believe my numbers? Up to that point, soybean returns held a significant advantage over corn returns on most ground in Kentucky. Corn Yield Calculator | Maximize Profit | Avipel (Available online at, https://www.ers.usda.gov/webdocs/publications/47548/11516_tb1922.pdf?v=0 Accessed: 30th November 2018). There are a number of barriers such as the technology required for weed control, organic seed availability, market, insurance etc., which prevent mass scale conversion to organic farming. Net income will equal zero. This method monetises the impact of corn production by equating the change in life satisfaction, as a measure of well-being, from a marginal increase in corn production to the change in income required to yield an equivalent change in well-being. Ht varieties herbicide tolerant and offer weed control option to corn growers. Federal aid in the form of Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments have increased returns and the financial stability of grain farms in 2018, 2019, and likely in 2020. EPA. A higher yield likely would also lead to more corn supply and carry over into the 2021 marketing year, causing lower expected prices in 2021. Without this aid, which has not been announced or legislated, farmer return in 2020 would be projected at -$112 per acre. (Available online at, https://www.ers.usda.gov/data-products/agricultural-productivity-in-the-us/ Accessed: 30th November 2018). Johnson, J. M. F., Weyers, S. L., Archer, D. W. & Barbour, N. W. Nitrous Oxide, Methane Emission, and Yield-Scaled Emission from Organically and Conventionally Managed Systems. 20, 44, https://doi.org/10.5751/ES-07868-200344 (2015). However, we did not study the efficacy of these networks in Minnesota. In corn production systems, produced capital includes farm produce, farm machinery and equipment, road networks, irrigation infrastructure, drying, storage facilities, etc. Ecol. The Corn vs. The guide presents cost and return information for low, average, and high productivity soils. Granular data would also facilitate the development of an improved causal framework, affording future research increased confidence in its findings, and offering deeper insights. The contribution margin is used to cover overhead costs such as machinery ownership costs, family and hired labor, and cash rent. Curr. "World ending stocks are so low, it may take another year to build up a safety net of grain stocks.". Increases in particulate matter and associated health impacts are a global consequence of fertilizer application. UN. (2005). This ad hoc Federal aid is outside the legislated farm safety net, and was instituted to compensate farmers for trade difficulties (MFPs) and COVD-19 control measures (CFAP). Compare profitability of corn, soybean production - Farm Progress With lower soybean prices, corn might seem to have an edge. For example, cash rents have not declined much even in the face of lower prices since 2013, and particularly since 2018. In summary, despite substantially higher production costs, it is not out of the realm of possibility to see positive margins in 2023, particularly for rotation corn and soybeans produced on high productivity ground. 8-32 characters, include one number (0-9) and one letter (a-z), By clicking Create Account, you agree to our, Save DTNPF to your home screen: Tap on the arrow and then select, Crude Slides on Profit Taking as China's Macros Disappoint, In Latest Drama Over Ukrainian Grain, Russia Pulls Out of Black Sea Agreement, Farmers Talk Crop Threats, Rain Wishes and Industry Rumors, Increase yields and savings with precision weather. Rising fertilizer and input costs are making the decision to plant corn vs. soybeans especially difficult for growers seeking maximum profit potential this season. The environmental costs and benefits of high-yield farming. Farmers nationwide are already beset by natural events such as fires, floods and storms such as derechos and tornadoes that pose threats to their corn yields and other crop yields. Having considered all variables, experts have come to the conclusion that farms averaged $673 total revenue per acre and averaged $664 total cost per acre. Lets explore another key waycorn seed treatmentfor farmers to raise corn crop yield. For high productivity land, the breakeven prices for rotation corn and rotation soybeans are expected to be $5.62 and $12.64 per bushel, respectively. The 215 bushel yield is a trend yield, which will be updated after July weather provides better indications of yields. Cover crops and diverse, multi-year, rotations were commonly used in organic systems, in contrast to a two-year corn-soy rotation in a conventional system. (2008). Sinclair is also a strong proponent of flex leases. As with corn, higher soybean yields likely lead to more soybean supplies and lower prices for 2021. We use estimates of P export from cropland modelled by the Minnesota Pollution Control Agency56 and weighted those by the proportion of cropland that is used for corn production. The use of the evaluation framework can help to improve decision making at farm and policy level to develop sustainable agriculture in order to minimize environmental and health related costs to society and economy. In 2018, trade difficulties with China caused soybean exports to decline. 76, 1347, https://doi.org/10.1016/0304-8853(80)90845-8 (2012). The yield of 68 bushels per acre is a trend yield, which likely will change as the growing season progresses. There are three dominant types of GM/transgenic corn varieties used in US Herbicide-tolerant (Ht) corn, Bacillus thuringiensis (Bt) corn and Stacked (Ht & Bt) corn. However, because travel cost and hedonic methods rely on understanding the biophysical responses of individual lakes and local market conditions that cannot be extrapolated statewide, we did not apply them to the water quality impacts of corn production. Agriculture also produces many benefits to human society in the form of food, feed, fibre, bio-products, maintenance of genetic material, carbon sequestration, landscape aesthetics, recreational opportunities, etc., which are widely known as ecosystem services and increasingly being studied in agricultural systems10,11. Harpinder Sandhu. There is need to develop pathways for change in consultation with the farming community with appropriate support from policy to effectively contribute towards the improvement in the environment and the well-being of society. Therefore, a multi-disciplinary team is required to undertake such an assessment. The observed differences between GM and organic corn in production (Table2) could be due to scale of farms. Fertilizer cost and cash rent have declined since their peaks in 2013 and 2014. PubMed This report compares the soybean demand in the production of traditional meat, plant-based meat and cell-cultured meat. Schultz, T. W. Investment in Human Capital. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. While our results show a statistically significant association between corn intensity in the proximity of individuals and their health, we cannot determine the channels through which this relationship is realised. In the end, soybeans are still removing a substantial amount of nutrients off that field." Variable cost per acre in 2023 is projected to be $373 per acre ($6.66 per bushel), or approximately 13.4 percent higher than they were in 2022. In addition to increased demand for corn, reductions in funding for the US Conservation Reserve Program have resulted in conversion of hundreds of thousands of acres of retired land to corn production33. Current databases are of limited use in terms of the analysis, as they dont have individualized information about production, area, market prices of different types of varieties, for example, Bt, Ht, stacked, different organic varieties etc. Matson, P. A., Parton, W. J., Power, A. G. & Swift, M. J. (A report of the International Panel of Experts on Sustainable Food Systems, 2017). Measuring and Valuing Social Capital: A Systematic Review. If uses do not increase, a combination of two items will need to occur: These factors are illustrated by evaluating time trends of corn and soybean returns and then associating return periods with corn and soybean use. Current futures prices seem to indicate that corn and soybean prices might average $4.45 and $11.40 per bushel in 2021/22, respectively. More research is required to understand the magnitude of differences in leaching between the systems. For 2022, the projected break-even price to cover total costs is $4.73 per bushel ($1,064 total cost / 225 expected yield). Sandhu, H. et al. We have linked land use data to measures of general health from the Gallup Daily tracking survey. Organic farming system is a mixed production system where multiple organic crops are grown in rotation with livestock. Profit boils down to yield multiplied by price, minus cost. Please correct the following errors and try again: We've detected that you are using an unsupported browser. Avipel also causes no aquatic or terrestrial plant toxicity. Ecosyst. USA 96, 59956000 (1999). It also could have postponed making necessary adjustments that otherwise would have occurred in a low-price environment. The views or opinions expressed in this article are those of the author and may not reflect those of AGDAILY. The tenant farms through the ditches to get every last penny from the farm.". This an organic chemical found naturally in numerous plant species, from aloe vera and rhubarb to greater plantains and sennas. Well-being valuation method is then used to monetize the general health impact of corn production. USDA/NASS 2022 State Agriculture Overview for Colorado According to consumer preferences, healthier snack options with favorable sensory attributes are increasingly sought after, with physically active individuals placing greater emphasis on product quality, while those leading sedentary lifestyles prioritize calorie content and taste. Water Quality in Organic Systems. The projections show decreased profitability from the 2021 year for corn growers, based on a $6.60 bushel price, when researchers estimate the high-productivity farmland could produce $500 per acre profit for growers. (For more on retail fertilizer prices, please read: https://www.dtnpf.com/). Erosion driven by wind or water reduces the quality and productive potential of soil, and eroded sediment in waterways can damage infrastructure and fisheries. The average break-even from 2012 to 2021 was $8.92 per bushels, $2.13 per bushel below the projected 2021 level. Please contact us at agweb@purdue.edu so we can help. As a member of the DTNPF online community you can contribute to discussions, save your settings, get exclusive email alerts and access to special online sections, and read e-newsletters. Since 1900 there has been a continuous downward trend in the rural population due to migration to urban areas. For example, harmful algal blooms in Lake Erie; unsafe levels of nitrate in the rivers Des Moines, Iowa; high nitrate levels in two municipal wells in Randall, Minnesota. As a baseline, the average number of kernels per ear is 385. Ecol. A great alternative browser focused on user privacy. The kids. The results from the analysis suggests a positive influence of both systems on produced and social capital in Minnesota. 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Nature 558, 7 (2018). 2021 Purdue Crop Cost and Return Guide - Purdue Ag Econ Report The 2021 Purdue Crop Cost and Return Guide, which is available for free download from the Center for Commercial Agriculture website ( here ), gives estimated costs for planting, growing and harvesting a variety of crops, as well as estimated contribution margins and earnings. H.S., C.W., F.B., K.K. Government payments are expected to zero in 2023. It is important to mention that although there are clear profits and losses, this does not sum up the complete profitability of a corn or soybean farmer.
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