Corn Production Costs in Illinois on the Rise

Wednesday, September 27, 2023

Corn production in Illinois has encountered significant challenges in recent years due to the relentless surge in production costs. Coupled with the anticipation of lower commodity prices, this has cast a shadow over farm profitability in 2023 and 2024 compared to the preceding three years.

Direct Costs:

Direct costs cover a bunch of spending, like stuff needed for farming, such as fertilizers, seeds, and bug-killing chemicals. Since 2000, these costs have been going up a lot, around 7% every year. Although there's a little hope that total direct costs might drop a bit in 2024 after hitting record levels in 2023, they're still very high compared to what farmers expect to earn.

Fertilizer Costs:

Fertilizer prices are super up and down lately because they're linked to how much other things cost, like crops and energy. For the 2023 crop, it's expected to cost about $250 per acre, but there's some good news as it might go down to $180 per acre in 2024, thanks to cheaper nitrogen fertilizer.

Seed Costs:

Seed costs have been on a steady climb, going up bit by bit in recent years. In 2023 and 2024, we're looking at record-high seed costs of $126 per acre. This trend means that farmers will likely spend 11% to 12% of what they earn from their corn on seeds, which is about the same as before.

Pesticide Costs:

Bug-killing chemical costs have shot up recently because of things like bugs getting stronger against the chemicals and corn prices going up. The numbers suggest that bug-killing chemical costs will hit an all-time high in 2024.

Impact on Farmers:

The growing expenses of making corn are making it hard for farmers to make money. It's even tougher because they think they'll get less money for their corn in 2023 and 2024. To deal with this, farmers might have to figure out how to spend less money or get more corn from their fields to make up for the lower profits.

The rising costs of corn production in Illinois are a challenge for farmers. Farmers will need to carefully manage their costs and adjust their production practices in order to remain profitable in the face of lower expected commodity prices.