by: Chris Zoller, Extension Educator, ANR
The United States Department of Agriculture Economic Research Service (USDA-ERS) recently released a report of costs and returns for U.S. soybean production between 2012 and 2020. During the period examined, the total cost of producing one acre of soybeans increased 14 percent in the United States. During the same time, the returns to growers decreased by 14 percent (Figure 1.).
Prices Received and Return to Growers
Prices paid to U.S. soybean producers between 2012 and 2020 ranged from a low of $8.61 per bushel in 2018 and 2019 to a high of $14.21 per bushel in 2012 (Table 1). Total production costs, including operating and overhead, increased $62 per acre between 2012 and 2020. The largest cost increases during this period were attributed to machinery/equipment and the opportunity cost of land. The per acre returns in 2020 were greater than the cost of production for the first time in three years.
Table 1. Gross returns per acre and soybean price per bushel, U.S. soybean producers 2012-2020.
| Year | Gross Returns per Acre (excluding gov’t. payments) | Price per Bushel at Harvest |
| 2012 | $597 | $14.21 |
| 2013 | $571 | $13.28 |
| 2014 | $522 | $10.88 |
| 2015 | $431 | $8.97 |
| 2016 | $492 | $9.46 |
| 2017 | $454 | $9.28 |
| 2018 | $458 | $8.61 |
| 2019 | $429 | $8.61 |
| 2020 | $515 | $9.67 |
| Average | $496 | $10.33 |
(Source: USDA-ERS, May 2021 and June 2021)
Soybean Returns and Costs – Ohio Farm Business Analysis & Benchmarking Program
Ohio State University Extension utilizes the FINPACK software program to complete a financial analysis of farms enrolled in the Ohio Farm Business Analysis and Benchmarking Program.
Returns
This program calculates revenue (yield x price) and adds crop insurance income and “other” crop income to calculate the gross return per acre. Other crop income can include sale of crop byproducts such as soybean fodder or income from programs directly related to that year’s crop. Income from government programs such as ARC or PLC are not included in other crop income. During this analysis period, average soybean prices received by participating farms ranged from a low of $8.85 per bushel (2018) to a high of $14.09 per bushel (2012). Revenue from crop insurance and other crop income categories ranged from a low of $.08 per acre in 2013 to a high of $80 per acre in 2019.
Expenses
The FINPACK program calculates direct and overhead expenses. Examples of direct expenses include seed, fuel, fertilizer, chemicals, crop insurance, operating interest, and labor. Overhead costs are incurred simply because you own equipment, buildings and land, and must be paid regardless of whether a crop is planted. Examples include hired labor that is not crop-specific, property taxes, farm insurance, non-current interest, and depreciation.
Financial Performance of Ohio Soybean Farmers
The following table is the returns and expenses of all soybean enterprises in the OSU Extension analysis.
Table 2. Average gross returns, total expenses, net return per acre, and soybean price received for owned and rented soybean acres, Ohio Farm Business Analysis and Benchmarking Program, 2012 – 2019.
| Owned Land | Rented Land | |||||||
| Year | Gross Return/Acre (Owned Land) | Total Expenses/Acre (Owned Land) | Net Return/Acre (Owned Land) | Price/Bushel
(Owned Land) |
Gross Return/Acre (Rented Land) | Total Expenses/Acre (Rented Land) | Net Return/Acre (Rented Land) | Avg. Price/Bushel
Received (Rented Land) |
| 2012 | $641 | $422 | $218 | $14.09 | $654 | $452 | $201 | $13.88 |
| 2013 | $599 | $443 | $156 | $13.08 | $594 | $435 | $158 | $12.94 |
| 2014 | $548 | $446 | $102 | $10.07 | $502 | $423 | $79 | $10.29 |
| 2015 | $428 | $396 | $32 | $8.83 | $426 | $432 | -$4.95 | $9.37 |
| 2016 | $510 | $413 | $97 | $9.30 | $508 | $442 | $66 | $9.42 |
| 2017 | $493 | $401 | $91 | $9.54 | $491 | $462 | $28 | $9.55 |
| 2018 | $546 | $423 | $123 | $8.95 | $554 | $443 | $110 | $8.85 |
| 2019 | $498 | $445 | $52 | $8.87 | $512 | $454 | $58 | $8.90 |
| Ave. | $532 | $423 | $108 | $10.34 | $530 | $442 | $86 | $10.40 |
The Ohio Farm Business Analysis and Benchmarking Program also separates the financial performance of the high 20 percent of soybean enterprises for the farms (sorted by net return per acre) who provided data. Table 3 summarizes financial performance of the high 20 percent in each year for which data is available.
Table 3. Average gross returns, total expenses, net return per acre and soybean price received for owned and rented soybean acres, high 20% of farms sorted by net return per acre, Ohio Farm Business Analysis and Benchmarking Program, 2012 – 2019.
| Owned Land | Rented Land | |||||||
| Year | Gross Return/Acre | Total Expenses/Acre | Net Revenue/Acre | Avg Price/Bu. | Gross Return/Acre | Total Expenses/Acre | Net Revenue/Acre | Price/Bu. |
| 2012 | $875 | $397 | $477 | $15.21 | $862 | $448 | $414 | $15.13 |
| 2013 | ND1 | ND1 | ND1 | ND1 | ND1 | ND1 | ND1 | ND1 |
| 2014 | $702 | $390 | $311 | $10.29 | $654 | $398 | $256 | $10.48 |
| 2015 | $477 | $292 | $185 | $9.89 | $469 | $355 | $114 | $10.22 |
| 2016 | ND1 |
ND1 |
ND1 |
ND1 |
$587 | $377 | $209 | $9.76 |
| 2017 |
ND1 |
ND1 |
ND1 |
ND1 |
$537 | $408 | $128 | $9.81 |
| 2018 | $616 | $368 | $247 | $9.06 | $615 | $377 | $238 | $8.94 |
| 2019 | $616 | $411 | $205 | $9.15 | $575 | $389 | $185 | $8.90 |
| Ave. | $657 | $371 | $285 | $10.72 | $614 | $393 | $194 | $10.46 |
(Source: Ohio Farm Business Analysis & Benchmarking Program, 2012-2019)
1 No data available for a high 20% group
Comparing the Data
The average price per bushel received for each group, 2012-2019:
- S. soybean producers from the USDA-ERS analysis was $10.41
- Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) was $10.34
- Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) was $10.40
- High 20% of Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) was $10.72
- High 20% of Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) was $10.46
When comparing the gross returns of U.S. and Ohio soybean growers, 2012 – 2019:
- The gross return/acre for U.S. soybean producers from the USDA-ERS analysis was $494 per acre
- Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) averaged $532 per acre
- Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) averaged $530
- Top 20% of Ohio growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) averaged $657 per acre
- Top 20% of Ohio growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) averaged $614 per acre
USDA-ERS did not provide the per acre soybean costs in their report. The per acre expenses for soybean enterprises in the Ohio Farm Business Analysis and Benchmarking Program (2012 – 2019) reported:
- All enterprises (owned land) averaged $423
- All enterprises (rented land) $442
- Top 20% group (owned land) $371
- Top 20% group (rented land) $393
The USDA-ERS analysis did not report the net returns of growers. When comparing the net returns of soybean enterprises of Ohio participants in the Ohio Farm Business Planning and Analysis Program (2012 – 2019):
- All enterprises (owned land) averaged $108/acre
- All enterprises (rented land) averaged $86/acre
- The top 20% group (owned land) averaged $285/acre
- The top 20% group (rented land) averaged $194/acre
Summary
Like all farm commodities, the revenue and expenses associated with growing soybeans is constantly moving. However, based on the summary of farms enrolled in the OSU Extension Ohio Farm Business Analysis and Benchmarking Program, implementing management practices to achieve the high 20 percent category can improve returns and profitability.
For additional information about soybean production in Ohio, consult with your OSU Extension Educator and view the OSU Soybean and Small Grain Website at https://stepupsoy.osu.edu/soybean-production, and the Ohio Agronomy Guide at https://stepupsoy.osu.edu/soybean-production/ohio-agronomy-guide-15th-edition.
If you are interested in learning more about the OSU Extension Ohio Farm Business and Analysis Benchmarking Program, visit https://farmprofitability.osu.edu/. Growers are also encouraged to use OSU Extension Farm Budgets available at https://farmoffice.osu.edu/farm-management/farm-budgets.
Sources:
Ohio Farm Business Analysis & Benchmarking Program, 2012 – 2019, https://farmprofitability.osu.edu/
USDA-ERS Charts of Note, June 2021, https://www.ers.usda.gov/data-products/charts-of-note
USDA-ERS Commodity Costs and Returns, May 2021, https://www.ers.usda.gov/data-products/commodity-costs-and-returns/