2018 Income Projections After Recent Price Declines

In recent weeks, cash corn prices have declined by $.50 per bushel and soybean prices by $1.80 per bushel, resulting in much lower 2018 income expectations.  Crop revenue and returns are projected for corn and soybeans on high-productivity farmland in central Illinois.  These per acre returns then are used to project 2018 net income on a 1,500 acre grain farm.  At prices of $3.40 for corn and $8.45 for soybeans, 2018 net incomes could approach the average for the past two years if three conditions are met: 1) a significant amount of grain produced in 2017 was sold in 2018 for a marketing gain, 2) at least 25% of 2018 expected production was forward contracted at prices above those currently offered by the market, and 3) yields are at high levels similar to those in the past several years.  Not meeting any of these conditions could result in much lower incomes.  Of course, price increases could change the income outlook.