february 11, 2020 - usda world supply and demand estimates€¦ · major global trade changes for...

February 11, 2020 - USDA World Supply and Demand Estimates

Corn Market Reaction: March 2020 corn futures closed down 2 cents for the day at $3.79 ¾ with a trading range for the day of $3.78 to $3.82. December 2020 corn futures closed down 1 ½ cents at $3.92 with a trading range for the day of $3.90 ¼ to $3.93 ½. Increased ethanol production was offset by reduced exports. Export sales and shipments still remain well behind the pace needed to meet USDA’s marketing year goal. USDA Summary: This month’s 2019/20 U.S. corn outlook is little changed relative to last month, with offsetting changes to exports and corn used for ethanol. Exports are lowered 50 million bushels, reflecting the slow pace of shipments through January. Offsetting is a 50 million bushel increase in corn used for ethanol, based on Grain Crushings and Co-Products Production data through December and the robust pace of weekly ethanol production data as reported by the Energy Information Administration during the month of January. With no other use changes, U.S. corn ending stocks are unchanged from last month. The season-average corn price received by producers is also unchanged at $3.85 per bushel. Global coarse grain production for 2019/20 is projected higher. This month’s foreign coarse grain outlook is for larger production and consumption, and lower stocks relative to last month. Global corn production is raised 31 million bushels, with increases for South Africa, Moldova, and Ukraine more than offsetting a reduction for Vietnam. For South Africa, production is higher as timely rainfall during the month of January improves yield prospects. Major global trade changes for 2019/20 include higher projected corn exports for South Africa, Ukraine, and the EU, with a largely offsetting reduction for the United States. Corn imports are raised for Turkey and Brazil, with the latter reflecting larger-than-expected shipments to livestock production areas in the southern part of the country. Foreign corn ending stocks are down from last month, mostly reflecting reductions for Vietnam, Brazil, Paraguay, and the EU. Global corn ending stocks, at 11.684 billion bushels, are down 39 million from last month.

2015/16 2016/17 2017/18 2018/19

Est

2019/20 Projected January

2019/20 Projected February

2019/20 Change From

Previous Month

Change 2018/19

to 2019/20

Planted and Harvested Acres & Yield Planted (Million) 88.0 94 90.2 88.9 89.7 89.7 0.0 0.8 Harvested (Million) 80.8 86.7 82.7 81.3 81.5 81.5 0.0 0.2 U.S. Avg. Yield (Bu/Acre) 168.4 174.6 176.6 176.4 168 168 0.0 -8.4

Supply (Million Bushels) Beg. Stocks 1,731 1,737 2,293 2,140 2,221 2,221 0 81 Production 13,602 15,148 14,609 14,340 13,692 13,692 0 -648 Imports 68 57 36 28 50 50 0 22 Total Supply 15,401 16,942 16,939 16,509 15,962 15,962 0 -547

Use & Ending Stocks (Million Bushels) Feed and Residual 5,114 5,470 5,304 5,432 5,525 5,525 0 93 Ethanol 5,224 5,432 5,605 5,376 5,375 5,425 50 49 Food, Seed & Industrial 1,424 1,453 1,452 1,415 1,395 1,395 0 -20

Exports 1,901 2,294 2,438 2,065 1,775 1,725 -50 -340 Total Use 13,664 14,649 14,798 14,288 14,070 14,070 0 -218 U.S. Ending Stocks 1,737 2,293 2,140 2,221 1,892 1,892 0 -329 Foreign Stocks 10,523 11,515 11,295 10,396 9,832 9,794 -38 -602

Price and Stocks to Use Ratio U.S. Avg. Season Price ($/Bu) $3.61 $3.36 $3.36 $3.61 $3.85 $3.85 $0.00 $0.24

U.S. Stocks/Use 12.71% 15.65% 14.46% 15.54% 13.45% 13.45% 0.00% -2.10%

Source: USDA-WASDE February 11, 2020

World Corn Supply and Use (Million Bushels) 2019/20 Current Month

Country / Region Beginning

Stocks Production Imports Domestic

Feed Domestic

Total Exports Ending Stocks

World 12,616 43,761 6,613 27,750 44,691 6,526 11,686 United States 2,221 13,691 50 5,525 12,345 1,725 1,892 Total Foreign 10,396 30,069 6,563 22,225 32,346 4,801 9,794 Argentina 142 1,968 0 405 591 1,319 202 Brazil 180 3,976 47 2,224 2,618 1,417 168 Russia 15 571 2 307 344 224 19 South Africa 70 571 4 260 484 79 81 Ukraine 37 1,409 1 150 197 1,220 30 Egypt 71 252 390 559 657 0 55 E.U. 309 2,559 827 2,441 3,248 110 336 Japan 57 0 630 488 634 0 53 Mexico 200 984 689 1,043 1,752 28 94 Southeast Asia 105 1,203 705 1,571 1,878 29 106 South Korea 76 3 425 335 429 0 75 Canada 78 528 39 327 531 51 62 China 8,280 10,266 276 7,480 10,984 1 7,837 ROW 776 5,779 2,529 4,636 7,999 322 675 World Corn Supply and Use (Million Bushels) 2019/20: Current - Previous Month



Feed Domestic


World 3 30 22 38 71 5 -38 United States - - - - 50 -50 - Total Foreign 3 30 22 38 21 56 -38 Argentina - - - - - - - Brazil - - 8 20 20 - -12 Russia - - - - - - - South Africa - 20 - - - 20 - Ukraine - 12 - -4 -4 20 -4 Egypt - - - - - - - E.U. 8 - - - - 16 -7 Japan - - - - - - - Mexico - - - - - - - Southeast Asia 1 -14 - - - - -13 South Korea - - - - - - - Canada - - - - - - - China - - - - - - - ROW -6 12 15 22 6 - -2


Cotton Market Reaction: March 2020 cotton futures closed up 0.04 cents at 68.32 with a trading range for the day of 67.89 to 68.55 cents. December 2020 cotton futures closed up 0.06 cents at 69.31 with a trading range for the day of 69.01 to 69.65 cents. No revisions to U.S. supply and demand were made this month and only minor adjustments to the global balance sheet.

USDA Summary: The U.S. cotton estimates for 2019/20 are unchanged, except for a 1 cent-per-pound reduction in the season-average upland farm price, to 62 cents, 8.3 cents lower than in 2018/19.

The 2019/20 world cotton forecasts include a 2.5-million-bale increase in ending stocks, driven by both larger production and lower consumption. A 1-million-bale decline in China’s expected consumption is the largest single change this month: consumption is lower despite the positive impact of the U.S.-China trade agreement, due in part to the negative economic effects of the novel coronavirus outbreak. Consumption is also projected lower in Vietnam but higher in Pakistan and Turkey. Production in Brazil in 2018/19 is revised upward by 480,000 bales reflecting higher production in Mato Grosso. Pakistan, Brazil, and Tanzania production in 2019/20 is revised upward. Total production changes this month come to a 1.3-million-bale global increase, while total consumption changes net to a 1.2-million-bale reduction.

2015/16 2016/17 2017/18 2018/19

Est



2019/20 Change From

Previous Month

Change 2018/19

to 2019/20

Planted and Harvested Acres & Yield Planted (Million) 8.58 10.07 12.72 14.1 13.74 13.74 0 -0.36 Harvested (Million) 8.07 9.51 11.1 10.21 11.8 11.8 0 1.59

U.S. Average Yield (lb/acre) 766 867 905 864 817 817 0 -47

Supply (Million Bales) Beg. Stocks 3.65 3.8 2.75 4.2 4.85 4.85 0 0.65 Production 12.89 17.17 20.92 18.37 20.1 20.1 0 1.73 Imports 0.03 0.01 0 0 0.01 0.01 0 0.01 Total Supply 16.57 20.98 23.68 22.57 24.96 24.96 0 2.39

Use & Ending Stocks (Million Bales) Domestic 3.45 3.25 3.23 2.98 3 3 0 0.02 Exports 9.15 14.92 16.28 14.76 16.5 16.5 0 1.74 Total Use 12.6 18.17 19.5 17.74 19.5 19.5 0 1.76 U.S. Ending Stocks 3.8 2.75 4.2 4.85 5.4 5.4 0 0.55

Foreign Stocks 91.11 77.65 76.64 75.14 74.19 76.72 2.53 1.58 Chinese Stocks 58.2 45.92 37.99 35.67 32.75 33.75 1 -1.92

Price and Stocks to Use Ratio U.S. Avg. Season Price ($/lb) $0.61 $0.68 $0.686 $0.703 $0.63 $0.62 -$0.01 -$0.08

U.S. Stocks/Use 30% 15% 22% 27% 28% 28% 0.0% 0.4% Chinese Stocks/Use 166% 119% 93% 90% 85% 90% 4.9% -0.3%


World Cotton Supply and Use (Million 480 lb Bales) 2019/20 Current Month



Use Exports Loss Ending Stocks

World 79.99 121.33 43.55 119.01 43.54 0.19 82.12 United States 4.85 20.1 0.01 3 16.5 0.06 5.4 Total Foreign 75.14 101.23 43.54 116.01 27.04 0.13 76.72 Central Asia 2.31 5.86 0 4.34 1.69 0 2.14

Afr. Fr. Zone 1.44 5.87 0 0.14 5.6 0 1.56

Australia 1.57 0.68 0 0.04 1.3 0 0.91

Brazil 12.26 12.7 0.03 3.4 8.9 0 12.68

India 9.31 29.5 2.3 24.5 3.6 0 13.01

Mexico 0.77 1.57 0.8 1.95 0.43 0.03 0.74

China 35.67 27.25 8.5 37.5 0.18 0 33.75

E.U. 0.23 1.96 0.65 0.69 1.81 0.03 0.31

Turkey 1.59 3.4 4.1 7.2 0.35 0 1.54

Pakistan 2.5 6.6 4.2 10.8 0.1 0.03 2.37

Indonesia 0.53 0 3.05 3.05 0.01 0 0.53

Thailand 0.18 0 0.98 0.98 0 0.03 0.15

Bangladesh 1.58 0.14 7.2 7.3 0 0.01 1.61

Vietnam 1.19 0 6.8 6.8 0 0 1.19

ROW 4.01 5.7 4.93 7.32 3.07 0.00 4.23 World Cotton Supply and Use (Million 480 lb Bales) 2019/20: Current-Previous Month



Use Exports Loss Ending Stocks

World 0.46 0.85 -0.28 -1.21 -0.31 0.00 2.53 United States - - - - - - - Total Foreign 0.46 0.85 -0.29 -1.21 -0.31 - 2.53 Central Asia - - - - - - - Afr. Fr. Zone 0.02 - - - -0.08 - 0.09 Australia 0 - - - -0.05 - 0.05 Brazil 0.48 0.2 - - 0.1 - 0.58 India - - 0.1 - -0.2 - 0.3 Mexico - - - - -0.02 - 0.03 China - - - -1 - - 1 E.U. - - - - -0.05 - 0.05 Turkey - - - 0.1 - - -0.1 Pakistan - 0.5 -0.1 0.2 - - 0.2 Indonesia - - -0.05 -0.05 - - - Thailand - - -0.02 -0.02 - - - Bangladesh - - - - - - - Vietnam - - -0.3 -0.3 - - - ROW -0.04 0.15 0.09 -0.14 -0.01 - 0.33


Soybeans Futures Market Reaction: March 2020 soybean futures were up ½ cents for the day closing at $8.84 ¾ with a trading range for the day of $8.78 to $8.89. November 2020 soybean futures closed unchanged at $9.10 ¼ with a trading range for the day of $9.13 ¾ to $9.22 ¼. Brazil’s production was increased to 4.593 billion bushels an all-time record.

USDA Summary: This month’s 2019/20 U.S. soybean outlook is for increased exports and lower ending stocks. Soybean exports for 2019/20 are projected at 1.825 billion bushels, up 50 million from last month partly reflecting increased imports for China. With soybean crush unchanged, soybean ending stocks are reduced 50 million bushels to 425 million. The U.S. season-average soybean price for 2019/20 is forecast at $8.75 per bushel, down 25 cents reflecting reported prices to date. The soybean oil price forecast is lowered 0.5 cents to 33.5 cents per pound. The soybean meal price forecast is unchanged at $305.00 per short ton.

This month’s 2019/20 global oilseed outlook includes higher production, trade, and stocks relative to last month. Global oilseed production is raised, with higher soybean, sunflowerseed, and cottonseed production. Partly offsetting is lower palm kernel production. Soybean production for Brazil is increased 73 million bushels to 4.593 billion due to favorable weather in Mato Grosso as well as improved rainfall in southern and northeastern soybean areas. Sunflowerseed production is increased for Ukraine on a higher yield. Palm kernel and palm oil production are reduced for Malaysia and Indonesia on current production to date and dry weather conditions throughout the past year.

Global 2019/20 oilseed exports are raised mainly on an increase to soybean trade. China’s soybean imports are increased 110 million bushels to 3.233 billion reflecting higher soybean crush. Correspondingly, soybean exports are increased for the United States, Brazil, and Ukraine. Global soybean ending stocks are 81 million bushels higher than last month, with higher stocks for China and Brazil.

2015/16 2016/17 2017/18 2018/19

Est



2019/20 Change From

Previous Month

Change 2018/19

to 2019/20

Planted and Harvested Acres & Yield Planted (Million) 82.7 83.5 90.2 89.2 76.1 76.1 0.0 -13.1 Harvested (Million) 81.7 82.7 89.5 87.6 75 75 0.0 -12.6 U.S. Avg. Yield (Bu/Acre) 48 51.9 49.3 50.6 47.4 47.4 0.0 -3.2

Supply (Million Bushels) Beg. Stocks 191 197 302 438 909 909 0 471 Production 3,926 4,296 4,412 4,428 3,558 3,558 0 -870 Imports 24 22 22 14 15 15 0 1 Total Supply 4,140 4,516 4,735 4,880 4,482 4,482 0 -398

Use & Ending Stocks (Million Bushels) Crushing 1,886 1,901 2,055 2,092 2,105 2,105 0 13 Exports 1,942 2,166 2,134 1,748 1,775 1,825 50 77 Seed and Residual 115 147 109 131 128 128 0 -3 Total Use 3,944 4,214 4,297 3,971 4,008 4,058 50 87 U.S. Ending Stocks 197 302 438 909 475 425 -50 -484 Foreign Stocks 2,687 3,213 3,201 3,178 3,078 3,208 130 30

Price and Stocks to Use Ratio U.S. Average Season Price ($/Bu) $8.95 $9.47 $9.33 $8.48 $9.00 $8.75 -$0.25 $0.27

U.S. Stocks/Use 4.99% 7.17% 10.19% 22.89% 11.85% 10.47% -1.38% -12.42% Source: USDA-WASDE February 11, 2020

World Soybean Supply and Use (Million Bushels) 2019/2020 Current Month Country / Region

Beginning Stocks Production Imports

Domestic Crush

Domestic Total Exports

Ending Stocks

World 4,087 12,471 5,541 11,182 12,899 5,567 3,632 United States 909 3,558 15 2,105 2,233 1,825 424 Total Foreign 3,178 8,913 5,526 9,077 10,667 3,742 3,208 Argentina 1,062 1,947 143 1,639 1,900 301 951 Brazil 1,118 4,593 6 1,608 1,705 2,829 1,182 Paraguay 18 364 0 143 146 217 19 China 715 665 3,233 3,160 3,810 5 798 E.U. 45 96 559 584 647 9 43 S.E. Asia 36 24 341 149 353 1 46 Mexico 8 9 220 228 230 0 7 ROW 176 1,215 1,023 1,566 1,875 379 161

World Soybean Supply and Use (Million Bushels) 2019/20: Current-Previous Month

Country / Region

Beginning Stocks Production Imports

Domestic Crush

Domestic Total Exports

Ending Stocks

World 35 62 105 28 35 86 80 United States - - - - - 50 -50 Total Foreign 35 62 105 28 35 37 130 Argentina - - - - - - - Brazil 6 73 - - 6 37 37 Paraguay 15 -11 - - - -11 15 China - - 110 37 37 - 73 E.U. 6 - - - 2 - 4 S.E. Asia - - - - - - - Mexico - - - - - - - ROW 8 - -6 -9 -10 11 1


Wheat Futures Market Reaction: March 2020 wheat futures closed down 10 cents at $5.42 with a trading range for the day of $5.39 to $5.51 ¾. July 2020 wheat futures closed down 7 ¾ cents at $5.44 ¾ with a trading range for the day of $5.42 ¼ to $5.53 ¾. Wheat exports were increased by 25 million bushels. Global stocks are estimated at 10.583 billion bushels an all-time record. Record stocks are prohibitive for dramatic price increases. USDA Summary: The outlook for 2019/20 U.S. wheat is for stable supplies, increased exports, and decreased ending stocks. The only supply or use category that was changed this month was a 25 million bushel increase in exports reflecting growing competitiveness in international markets. Ending stocks are cut by a corresponding amount and are now forecast to total 940 million bushels, a five-year low.

Global wheat supplies are lowered fractionally on small and mostly offsetting changes to beginning stocks and production. World exports are increased 66 million bushels led by a 37-million-bushel increase for the EU on strong shipments and more competitive prices. Kazakhstan is raised 29 million bushels, also on a fast export pace. United States is increased 26 million bushels and is projected to have the largest exports in three years. Partly offsetting are export reductions of 18 million bushels for Canada and 11 million bushels for Pakistan. World imports for 2019/20 are raised 70 million bushels led by a 29-million-bushels increase for China and a 26-million-bushels increase for Turkey, both on a strong pace to date. There are also several historical revisions for trade, consumption, and ending stocks reflecting updated export data, particularly for Pakistan. For the 2019/20 market year, global consumption and ending stocks are lowered fractionally though world ending stocks remain record large.

2015/16 2016/17 2017/18 2018/19

Est.



2019/20 Change From

Previous Month

Change 2018/19

to 2019/20

Planted and Harvested Acres & Yield Planted (Million) 55 50.1 46.1 47.8 45.2 45.2 0 -2.6 Harvested (Million) 47.3 43.8 37.6 39.6 37.2 37.2 0 -2.4 U.S. Avg. Yield (Bu/Acre) 43.6 52.7 46.4 47.6 51.7 51.7 0 4.1

Supply (Million Bushels) Beg. Stocks 752 976 1,181 1,099 1,080 1,080 0 -19 Production 2,062 2,309 1,741 1,885 1,920 1,920 0 35 Imports 113 118 158 135 105 105 0 -30 Total Supply 2,927 3,402 3,080 3,119 3,105 3,105 0 -14

Use & Ending Stocks (Million Bushels) Food 957 949 964 955 955 955 0 0 Seed 67 61 63 59 60 60 0 1 Feed 149 160 47 90 150 150 0 60 Exports 778 1,051 906 936 975 1,000 25 64 Total Use 1,951 2,222 1,981 2,039 2,140 2,165 25 126 U.S. Ending Stocks 976 1,181 1,099 1,080 965 940 -25 -140 Foreign Stocks 7,944 8,457 9,330 9,145 9,620 9,643 23 498

Price and Stocks to Use Ratio U.S. Avg. Season Price ($/Bu) $4.89 $3.89 $4.72 $5.16 $4.55 $4.55 $0.00 -$0.61

U.S. Stocks/Use 50.03% 53.15% 55.48% 52.97% 45.09% 43.42% -1.7% -9.5% Source: USDA-WASDE February 11, 2020

World Wheat Supply and Use (Million Bushels) 2019/20 Current Month



Feed Domestic


World 10,225 28,070 6,617 5,438 27,712 6,717 10,583 United States 1,080 1,920 105 150 1,165 1,000 940 Total Foreign 9,145 26,150 6,512 5,289 26,547 5,718 9,643 Argentina 64 698 0 2 226 478 59 Australia 182 573 20 191 320 301 155 Canada 222 1,189 17 173 356 863 207 E.U. 367 5,659 195 2,039 4,666 1,176 378 Russia 287 2,701 18 625 1,451 1,249 305 Ukraine 58 1,066 3 103 327 753 46 Bangladesh 46 44 220 11 261 0 50 Brazil 39 191 283 18 445 22 46 China 5,136 4,909 147 772 4,703 40 5,448 Japan 35 35 217 26 239 10 38 N. Africa 568 679 1,007 83 1,718 36 500 Nigeria 7 2 187 2 175 15 7 Sel. Mideast 432 833 643 140 1,438 28 442 Southeast Asia 200 0 992 288 944 38 210 India 624 3,755 1 220 3,601 18 761 Kazakhstan 62 423 11 59 235 220 40 ROW 814 3,395 2,552 537 5,441 467 952

World Wheat Supply and Use (Million Bushels) 2019/20: Current - Previous Month



Feed Domestic


World 8 -16 70 -13 -7 64 -2 United States - - - - - 25 -25 Total Foreign 8 -16 70 -13 -7 40 23 Argentina - - - - 4 - -4 Australia - - - - - - - Canada 4 - - 13 13 -18 10 E.U. - - - -18 -18 37 -18 Russia - - - - - - - Ukraine - - - - - - - Bangladesh 8 - - - -4 - 12 Brazil - - - - - - - China - - 29 - - - 29 Japan - - - - - - - N. Africa - -15 0 - - - -14 Nigeria - - - - - - - Sel. Mideast - - - - - - - Southeast Asia 19 - 7 - 3 -1 25 India - - - - - - - Kazakhstan - - 6 -7 -7 29 -16 ROW -24 -1 27 - 4 -7 -1


February 2020 Profitability Update

2020 Estimated Returns - Non-Irrigated

The profitability outlook has been updated after the release of the February 2020, USDA WASDE report. For the Table below, non- irrigated yields were estimated as the 5-year Tennessee state average: 165 bushels per acre for corn, 47 bushels per acre for full-season soybeans, 1,072 pounds per acre cotton, and 69 bushels per acre for wheat. Prices used for grain sales are based on 2020 new crop cash bids as reported by the USDA AMS Market report dated February 14, 2020 for grain sold at Memphis barge points. The price of $0.65 per lb. of cotton is based on a cotton loan price of $0.52, an assumed $0.105 cotton equity, and a gin rebate of $0.025. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, MFP etc.). Costs shown below are based on the 2020 UT Extension Row Crop budgets with adjustments made where warranted. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton - $ 112, Soybeans - $41, Corn - $142 (includes 180 units of N), and Wheat/Soybeans - $95. These cost reflect a slight increase from 2019 to 2020 along with other nutrients where warranted. Land cost was estimated as a share arrangement: 25% of gross revenue less 25% of the crop insurance premium. Additional details on expenses can be found in the 2020 UT Crop Budgets.

Based on projected yields, prices, and expenses all crops are projected to have positive returns over variable expenses and land costs, but negative net returns over variable, land, and fixed costs. Producers with higher yields or lower cost structures may attain improved (or positive) net return over all costs. The table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems. Please contact your local County Extension office or Area Specialist - Farm Management for assistance in developing a budget or financial plan for your farm.

Cotton Soybeans Corn Wheat/Soybeans

Yield 1072 lbs. 47 bu. 165 bu. 69 bu./35 bu. Price (as of 2/14/2020) $0.65 lb. $9.32 bu. $3.91 bu. $5.74 bu./$9.32

Revenue $697 $438 $645 $722 Variable Expenses $470 $245 $384 $455

Returns Over Variable $227 $193 $261 $267

Land Costs (25% of Revenue-25% crop

insurance) $172 $108 $158 $177

Returns Over Variable and Land

Costs $55 $85 $103 $90

Fixed Costs (Capital Recovery and

Management Labor) $182 $118 $116 $114

Returns Over Specified Costs ($127) ($33) ($13) ($24)

Breakeven Price at Average Yield and

Specified Cost $0.81 $10.25 $4.02 $6.15/$9.60

2020 Estimated Returns - Irrigated

For the table below, irrigated yields were estimated as: 225 bushels per acre for corn, 65 bushels per acre for full-season soybeans, and 1,200 pounds per acre cotton. Prices used for grain sales are based on 2020 new crop cash bids as reported by the USDA AMS Market report dated February 14, 2020 for grain sold at Memphis barge points. The price of $0.65 per lb. of cotton is based on a cotton loan price of $0.52, an assumed $0.105 cotton equity, and a gin rebate of $0.025. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, MFP etc.). Costs shown below are based on the 2020 UT Extension Row Crop budgets with adjustments made where warranted. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: cotton - $ 116/acre, soybeans - $51/acre, corn - $181/acre. These cost reflect a slight increase from 2019 to 2020 along with other nutrients where warranted. Land cost was estimated at 25% of gross revenue less 25% of the crop insurance premium. Irrigation fixed costs and energy costs will vary greatly among producers and systems. These projections include: variable expenses and energy costs for irrigation of $49 per acre for corn, $42 per acre for cotton, and $32 per acre for soybeans. Fixed irrigation costs of $96 per acre for irrigation equipment are used in the table below. A management expense of $36 per acre is included in Fixed Costs – Capital Recovery and Management Labor. This is $18 above the dryland crop management labor expense. Based on projected yields, prices, and expenses all crops are projected to have positive returns over variable expenses and land costs, but negative net returns over variable, land, and fixed costs. Producers with higher yields or lower cost structures may attain improved (or positive) net return over all costs. The table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems. Please contact your local County Extension office or Area Specialist - Farm Management for assistance in developing a budget or financial plan for your farm. A whole farm financial plan can be completed for you for free by your Area Farm Management Specialist.

Cotton Soybeans Corn Wheat/Soybeans Yield 1200 lbs. 65 bu. 225 bu. 68 bu./45 bu.

Price (as of 2/14/2020) $0.65 lb. $9.32 bu. $3.91 bu. $5.75 bu./$9.32 bu. Revenue $780 $605 $880 $810 Variable

Expenses(includes energy cost)

$476 $288 $475 $449

Fixed Irrigation Costs per Acre $96 $96 $96 $86

Returns Over Variable & Fixed IR Costs $208 $221 $309 $275

Land Costs (25% of Revenue-25% crop

insurance-25% fixed irrigation costs)

$168 $125 $193 $174

Returns Over Variable, IR Fixed

Cost and Land Costs $40 $96 $116 $100

Fixed Costs (Capital Recovery and

Management Labor) $119 $120 $137 $216

Returns Over Specified Costs ($79) ($24) ($21) ($116)

Breakeven Price at Average Yield and

Specified Cost $0.74 $9.80 $4.04 $7.05/$10.75

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