1. 2014 Illinois Farm Economics Summit The Profitability of Illinois Agriculture: Back to the Future? 2015 Crop and Income Outlook: Conserve Cash Now Gary Schnitkey schnitke@illinois.edu University of Illinois

2. 2014 Illinois Farm Economics Summit Crop Prices, Market Year Average Prices and Forecasts ----------------------------------------- Period --------------------------------------------- 75-0607-141314F15F Corn ($/bu.)2.374.854.463.403.80 Soybeans ($/bu.)6.02101.5313.0010.009.75 Wheat ($/bu.)3.326.626.875.905.00

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4. Corn and Soybean Non-land Costs, Central Illinois

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6. Select Cost Items, Corn, Central Illinois 2000-0520132014P2015P ------------------------------------- $ per acre --------------------------------- Fertilizer68193163148 Pesticides376660 Seed40114119124 Mach Depreciation23636669 Non-land costs272615588585 Cash rent144290293296

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8. Operator and Farmland Returns Northern Illinois Farmland 200920102011201220132014P2015P Corn Yield178174177143204215192 Corn Price3.635.036.106.604.703.503.80 Bean Yield49566051596259 Bean Price9.7811.3112.7114.313.209.509.75 Operator and Land Return Corn15644156154035814194 Soybeans206396499444437242196 Corn 66% Beans 33%173426540508384175128

9. 2014 Illinois Farm Economics Summit Grain Farm Net Income 9

10. 2014 Illinois Farm Economics Summit Responses 1.Corn versus soybean acres 2.Lower or eliminate capital purchases 3.Lower fertilizer and seed costs 4.Lower cash rents 5.Reduces other cash flows 10

11. What will happen to corn versus soybean acres in 2015? Last years income favors soybeans. Current prices favor move to soybeans in 2015 FarmdocDaily article, October 28, 2014

12. 2014 Illinois Farm Economics Summit 12 Capital Purchases, Illinois Grain Farms

13. 2014 Illinois Farm Economics Summit 13 Capital Purchases and Net Income, Illinois Grain Farms

14. 2014 Illinois Farm Economics Summit Cash Rent by County, 2014  Released by USDA, September 5, 2014  2014 cash rents  Average cash rents

15. 2014 Illinois Farm Economics Summit Average Versus Professionally Managed, 2013

16. 2014 Illinois Farm Economics Summit Professionally Managed Rents

17. 2014 Illinois Farm Economics Summit Operator and Farmland Returns Northern Illinois Farmland 200920102011201220132014P2015P Operator and Land Return Corn15644156154035814194 Soybeans206396499444437242196 Corn 66% Beans 33%173426540508384175128 Cash rent177188222247262265255 Farmer return (1)-4238318261122-90-140 (1) Farmer return = Operator and land return – cash rent

18. 2014 Illinois Farm Economics Summit Operator and Land Returns Projected-2015Long-runHigher Corn Price$3.70$4.60$5.40 Soybean Price9.75$11.00$12.20 Operator and Land Return$168$294$410 18 Returns for different prices Costs and yields for Northern Illinois (2015 Illinois Crop Budgets)

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20. 2014 Illinois Farm Economics Summit Summary Incomes lower in 2014 and 2015 Responses: 1.Corn versus soybean acres 2.Lower or eliminate capital purchases 3.Lower fertilizer and seed costs 4.Lower cash rents 5.Reduces other cash flows 20