Prices and yields have been updated after the August 12^th USDA Supply & Demand report. This August USDA report estimates yields based on producer surveys. For Tennessee, the estimated yields are above average with corn at 146 bushels/acre, cotton 979 lbs./acre, soybeans 42 bushels/acre and wheat at 68 bushels/acre. Grain sorghum yields are not reported for Tennessee. The midpoint of USDA’s price projections are $4.90 bushel corn, $0.80 pound cotton ($0.88 with seed rebate, etc.), $4.60 bushel grain sorghum, $11.35 bushel soybeans, and $7.00 bushel wheat. With an increase in yields, these midpoints for USDA’s price projections for all crops except double crop soybeans are above the breakeven prices at the bottom of the table. Prices will continue to be volatile as harvest nears, producers should look closely at pricing opportunities.  Breakeven prices are calculated at August 12^th USDA estimated yields and the specified costs including variable, land and fixed cost. Prices will vary depending on location and buyers. The biggest change this month in Tennessee is the resurgence of cotton on the estimation of Tennessee record yields and strong prices. It has moved from the lowest return crop at average yields to the highest return crop considering estimated record yields. All crops will need a good fall harvest period to achieve projections. Please note the bottom table for 2014 planning.

This table 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. Double crop soybean yields have been adjusted downward to reflect the lateness of planting. One of the expense items that have to be watched is fertilizer. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: cotton – $ 150, Soybeans – $53, Corn – $170 (includes 150 units of N), Milo – $136, and wheat/soybeans – $131. Weed control costs with resistant weeds have also been difficult to estimate. These costs will vary greatly among producers and individual fields.  Production costs are estimates based on the 2013 University of Tennessee Crop Budgets, these costs will be updated as warranted as we go through the year. Please visit with your farm supplier on estimated cost in your area.

Producers with owned land and or cash rent can use Returns Over Variable as a guide in decision making. Producers with share rent ground should use Returns Over Variable and Land Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue is used in the table as a guide or method of comparison and should not be construed as the appropriate rent for a particular area. Producers who are not making major equipment changes can use UT budgets and this table as a guide in developing their own cropping decision budgets. If equipment changes are being made, then a whole farm financial plan would be better suited as a decision aid. Please contact your local County Extension office or Area Specialist – Farm Management for assistance in developing your own budget or farm financial plan.

Some differences have occurred due to rounding.

Planning for 2014

With the calendar turning to August, producers have started looking at wheat for 2014. With this examination, the crop planning for 2014 has become. Although cost of production rarely goes down, it does look like there will be some downward price pressure on fertilizer.   For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: cotton – $ 136, Soybeans – $49, Corn – $153 (includes 150 units of N), Milo – $123, and wheat/soybeans – $119. As we start to look at 2014 cropping decisions, cost of production will be adjusted as addition becomes available. At this time, wheat does look like a viable crop for 2014 with as much profit potential as the other crops. This table will continue to be updated as we near wheat planting time and as we go into 2014.