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Higher input prices and lower prices for corn and soybeans will likely hurt farm profitability in 2009, but University of Illinois economist Gary Schnitkey forecasts a brighter future for farmers.
He projects net farm operator returns for 2009 at a loss of $8 per acre for corn and a loss of $15 per acre for soybeans, which he says are the first negative returns within the past 20 years.
However, Schnitkey expects net operator returns for 2010 will finish in the black at $94 per acre for corn and $84 per acre for soybeans. He anticipates 2010 non-land costs for corn in Illinois at $440 per acre, a $77-per-acre decline.
His 2010 budget includes corn prices at $3.75 per bushel and soybeans at $10 per bushel. He put 2009 corn prices at $3.25 per bushel, which was down from $4.05 in 2008.
“These 2009 returns indicate that farms will likely face financial stress,” Schnitkey says. “However, returns in 2007 and 2008 were above average and many farmers built financial reserves that will carry them through the low income year of 2009.
“I don’t expect widespread financial difficulties across grain farms in the Corn Belt.”