After Much Resistance, Fixed Farm Expenses Turn Lower in 2016

by David Widmar

Fixed farm expenses play an important but often overlooked role in crop budgets and producer returns. A look at Purdue University crop budgets from 1990 to 2014 found that, on average, variable expenses accounted for 40% of total budgeted expenses while fixed expenses (family labor, land, and machinery) accounted for 60%.

Lowering costs of production are a critical step for managing in the current environment of low commodity prices and tight-margins. Fixed expenses, as we noted last year, have been slow to adjust. This week’s post takes an updated look at fixed expenses. Continue reading

USDA Cost of Production Estimates Show Little Change from 2016

by Brent Gloy

According to the latest USDA cost of production estimates, U.S. farmers will find the 2017 cost of producing corn, soybeans, and wheat basically unchanged from 2016.  Combined with the outlook for flat to slightly better commodity prices, the cost of production estimates portray yet another year of challenging economic conditions throughout corn, soybean, and wheat country. Continue reading

2017 Soybean Acre Madness

by David Widmar and Brent Gloy

When you think of March, two big events come to mind: the NCAA’s March Madness and the USDA’s Planting Intentions report. In both cases, speculation and anticipation is in full force on how the brackets and balance sheets will sort out. Furthermore, both the NCAA tournament and U.S. spring crop plantings will likely have a few surprises.

This week’s post takes a look at the latest crop insurance and commodity price data to provide some insights on what 2017 planting might have in store. Continue reading