Looking ahead to 2014, winter planning will play a key role in determining profitability.
Farm Futures' senior editor Bryce Knorr expects corn prices will average $4 per bushel. He says the soybean crop could be smaller than original estimates indicated. He expects 2014 futures could rally to $13. Of course, Brazil's soybean crop is the wildcard.
The biggest place farmers can save money in 2014 is on their fertilizer budget. As late, anhydrous ammonia has dropped $250/ton – a serious savings for the fall-applied crowd.
But, the potash market is looking even better with the recent breakup of the Russian cartel, Knorr adds. "If you're going to hold off on anything, I'd wait on potash," he says.
Knorr also recommends some serious comparison shopping when booking fertilizer for the 2014 crop. He says deals are out there; farmers need to be willing to put in the legwork to find them.
"It's like this: why pay $5 for a gallon of gas when you can drive to a different gas station and buy it for $3.50," Knorr adds.
Knorr and University of Illinois ag economist Gary Schnitkey expect cash rent to stay steady or potentially soften for the 2014 crop year. "Anyone who pays higher cash rent for 2014 is taking on a huge risk," Knorr adds.
Looking at USDA's NASS cash rent by county report, some softening would be welcome. NASS reports DeWitt County has the highest cash rent in Illinois at $385/acre.
Four additional counties have cash rent average over the $300 mark: Sangamon ($371), Macon ($309), Logan ($308) and Christian ($303). Statewide, cash rent increased by 5%.
For more on the upcoming crop year, be sure to check out the October Prairie Farmer.