by Nick Paulson and Gary Schnitkey, Department of Agricultural and Consumer Economics, University of Illinois

Illinois crop budgets for 2024 have been revised from their initial release in August (farmdoc daily, August 29, 2023). The main revision in the budgets is a reduction in the corn and soybean prices assumed for both 2023 and 2024, resulting in lower return and profitability projections.

Current farmer return expectations are negative for both corn and soybeans across all regions for 2024 for cash rented land at average cash rent levels, suggesting cost adjustments will be needed in 2024 and beyond.

As is always the case, actual returns can vary from projections made this early in the year.

Updated Crop Budgets

Updated 2023 and 2024 projections are provided in two publications in the Management section of farmdoc. The 2024 Crop Budgets are prepared for three regions – northern Illinois, central Illinois, and southern Illinois. Central Illinois is further broken out into budgets for high-productivity and low-productivity farmland.

Budgets for all regions include projections for corn-after-soybeans, corn-after-corn, soybeans-after-corn, soybeans-after-soybeans, and wheat.

A budget for double-crop soybeans is included for all regions except northern Illinois. The second publication – Revenue and Costs for Illinois Grain Crops – reports yearly revenues, costs, and returns of producing corn, soybeans, wheat, and double-crop soybeans by region of Illinois.

These budgets represent averages regardless of the preceding crop and are summarized from farms enrolled in Illinois Farm Business Farm Management (FBFM) for the 2017 to 2022 crop years, while projections are provided for 2023 and 2024.

Table 1 provides the updated 2024 budget projections for corn and soybeans across the four regions of Illinois (northern, central high-productivity, central low-productivity, and southern).

These updated projections are based on the following updated assumptions:

*Projected 2024 prices of $4.50 per bushel for corn and $11.50 for soybeans. These are roughly consistent with fall grain bids as of early January, futures markets, and current projections from the USDA for the 2024/25 marketing year. These prices represent significant downward revisions from those used in the August budget release ($4.80 for corn, $12.80 for soybeans).

*Yields for 2024 are assumed to be at trend levels which come from estimates based on historical yields. Over time, corn yields have increased at an average rate of about 2.0 bushels per year while soybean yields have increased at a rate of about 0.5 bushels per year.

*Non-land costs are based on historical expenses on Illinois farms, adjusted and updated based on current and expected price levels for inputs.

*Reported land costs are based on projected average cash rents by region which rely on trends in historical data.

Operator and Land Returns

Operator and land returns represent the amount remaining for the farmer and land costs after paying all non-land costs. Operator and land returns are currently projected to return to levels experienced during the 2014 to 2019 period when commodity prices had declined from higher levels in the late 2000s and early 2010s (see Figure 1). Projected operator and land returns are below average cash rent levels in each region, resulting in negative farmer return levels.

To read the entire report click here.