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Farm Income Projected Lower in 2023
by LuAnn Rolling, District Conservationist
According to the 2023 University of Illinois Crop Budget, farmer returns are projected to be 80% lower than 2022. They based the budget on projected input cost levels, trendline corn and soybean yields and used per-bushel prices of $5.30 for corn and $12.75 for soybeans. University of Illinois economists say it is reasonable to expect grain farm incomes to return to a lower level in the future, as always happens in agriculture. In their Grain Farm Income Projections for 2022 and 2023, they state that higher costs will lead to lower incomes even at historically high corn and soybean prices. “Prices below $5.00 per bushel for corn and $12.00 for soybeans will result in low incomes if not accompanied by higher yields or declines in costs.”

The 2023 Illinois Crop Budget shows non-land costs are projected to be $860 in 2023, up from $758 in 2022. According to the Budget, total costs have increased from $833 per acre in 2020 to a projected $1,161 per acre for 2023, an increase of 39%. So what can producers do? Consider cutting back on inputs, adjusting crop rotations to include a small grain, cover crops, switch to all no-till and add livestock.  Basically, consider trying to improve soil health in order to facilitate input cutbacks. We know that cover crops suppress weeds naturally and can reduce the need for pesticides.  If a producer considers the cost of reductions in inputs it more than makes up for the cost of seeding the covers. But this would also mean considering leaving the cover longer in the spring to have adequate cover for weed suppression and consider planting “green” into living cover.

We know that no-till and having a living root in the soil sets the stage for soil building which means nutrient cycling and input reductions, but it takes time. The soil needs to “rebuild” itself.  Changing soil biology does not happen overnight, or with one growing season.  Producers need to be patient and be willing to accept some setbacks in the process. Producers also need to realize that change happens faster if they are implementing several soil health building practices, not just no-till or just cover crops. The small grains add a third crop that’s harvested in July, and then producers could plant a multi-species cover crop, which needs a longer growing period than following corn or soybeans in Iowa. This multi-species can include legumes which build nitrogen in the soil for the following year’s crop.  Having the grain harvested mid-summer allows a window for manure application, followed by cover to capture manure nutrients for following crops. The small grain breaks two-year pest cycles, resulting in needing fewer insecticides. We can show that over the course of a three-year rotation of corn, soybeans, oats there is more profit than just corn, soybeans.

Faced with inflation, increases in costs of wages and fuel, supply disruptions and issues created by the Ukrainian Russian war, now is the time to start implementing practices to increase soil health and our resilience to both weather and social influences.