As costs soar, so too have prices, and profit-taking is still possible in 2022, according to crop budget projections issued by University of Illinois researchers on Wednesday.
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. The projection for 2022 is $365 per acre. That's a decrease of 27%.
Soybeans will take an even bigger hit, from $321 per acre profitability in 2021 to $179 per acre in 2022, according to the projections. That projection comes as more farmers say they intend to plant soybean acres at record rates, according to the USDA.Profits for soybeans are projected to decrease 44% from 2021.
Increased prices are largely responsible for the decreases, according to the projects. The total cost of raising corn is projected to rise 26%, while the total cost of raising soybeans is projected to increase 35%, according to the figures. Those increases come against a roughly 3% increase in projected revenues for corn and a less-than-1% decrease in projected revenues for soybeans.
"While projections are for profitability, one senses unease among farmers," researchers write. "Non-land costs are high, and positive returns are based on high prices. One wonders if an unwelcome event may occur, causing lower prices and much lower profits. Those concerns could have also been among the reasons farmers are not shifting to more corn in 2022 even though corn is projected to be more profitable. This unease likely will carry over into planning for 2023 production."