Ohio Corn, Soybean and Wheat Enterprise Budgets Project Low Returns for 2018

by: Barry Ward- Leader, Production Business Management, Ohio State University Extension

Production costs for Ohio field crops are forecast to be flat to slightly lower in 2018 depending on the crop and the profit picture remains poor, much the same as in 2017. Variable costs for corn for 2018 are projected to be $322 to $397 per acre depending on land productivity. Lower nitrogen fertilizer costs will likely be offset by somewhat higher fuel, chemical and interest costs.

Variable costs for 2018 Ohio soybeans are projected to range from $195 to $211 per acre. Wheat variable expenses for 2018 are projected to range from $161 to $189 per acre.

With continued low crop prices expected for 2018, returns will likely be low to negative for many producers. Projected returns above variable costs (contribution margin) range from $176 to $350 per acre for corn and $193 to $371 per acre for soybeans. (This is assuming fall cash prices of $3.75 per bushel for corn and $9.60 per bushel for soybeans.) Projected returns above variable costs for wheat range from $130 to $244 per acre (assuming $4.80 per bushel summer cash price).

Returns to land for Ohio corn (Gross Revenue minus all costs except land cost) are projected to range from -$46 to $116 per acre in 2018 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from $22 to $190 per acre depending on land production capabilities. Returns to land for wheat (not including straw or double-crop returns) are projected to range from -$46 to $61 per acre.

Total costs projected for trend line corn production in Ohio are estimated to be $778 per acre. This includes all variable costs as well as fixed machinery, labor, management and land costs. Fixed machinery costs of $130 per acre include depreciation, interest, insurance and housing. A land charge of $187 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $76 per acre. Returns Above Total Costs for trend line corn production are negative at -$155 per acre.

Total costs projected for trend line soybean production in Ohio are estimated to be $566 per acre. (Fixed machinery costs – $108 per acre, land charge – $187 per acre, labor and management costs combined – $54 per acre.) Returns Above Total Costs for trend line soybean production are also negative at -$81 per acre.

Total costs projected for trend line wheat production in Ohio are estimated to be $541 per acre. (Fixed machinery costs – $126 per acre, land charge – $187 per acre, labor and management costs combined – $40 per acre.) Returns Above Total Costs for trend line wheat production are also negative at -$179 per acre.

These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2018 have been completed and posted to the Farmoffice website:

https://farmoffice.osu.edu/farm-management-tools/farm-budgets

 

 

 

 

 

 

 

 

 

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