Goodbye to 2021’s high profits; hello to 2022’s high costs

It always seems odd to use the final week or two of the current year as a platform to view the coming year. How does looking in the rearview mirror give anyone a clear sense of what’s ahead?

That certainly was the case for most ag markets a year ago. For example, almost no one last December saw its $4.50 corn futures climbing to over $6 by the following May or last year’s $11 Christmas soybeans soaring to more than $15 by Easter. OK, maybe a few did, but I’d bet a boozy fruitcake even fewer believed it.

This year’s wild and crazy ride has — almost by default — set the stage for a more normal 2022.

Crop budgets

Our friends at farmdocDaily, the Land Grant Extension consortium based at the University of the Illinois, certainly think so. Their updated 2022 crop budgets are drearily, even worrisomely, more like something from the early 1980s than the 2020s.

The budgets, released Dec. 7, show that the coming crop year will be playing both ends against the middle. For example, per acre corn expenses — 18 elements from “fertilizers” to “fuel and oil” — for “High-Productivity,” central Illinois land will rise nearly 20%, from $631 to $755 per acre.

The same bruising cost hit will clobber soybean growers, too; per acre input costs will, the researchers claim, climb an astonishing 26% in 2022, from $377 to $476. Meanwhile, season average prices for both crops next year, according to the farmdocDaily team, will average $5 per bushel for corn and $12 per bushel for soybeans.

Profits

Those historically solid prices, combined with all-but-certain record-bending, central Illinois yields, means these farmers — despite the steep climb in input costs and slow slide in commodity prices — stand to clear an estimated $61 an acre in corn and $67 an acre in soybeans.

Go north or south in the long state, however, and the picture, like Illinois’ soils, changes dramatically. In cooler, later-planting northern Illinois, those per acre profits slip to $6 and $31 per acre, respectively, for corn and soybeans. In the thinner soils of steamier southern Illinois, profits all but disappear: a plus $7 for corn and plus $8 for soybeans.

By comparison, that makes 2021 a spectacular windfall. Highly-productive, central Illinois farmers, again according to the number-gathering extension gang, pocketed an estimated $378 an acre for corn and $305 for soybeans, five times more for each than what 2022 is estimated to hold.

Wheat

Wheat, however, will have its 2021 in 2022. Kansas City hard red winter wheat futures prices hover near $8, down from last month, but still the highest December price in years. Equally important, will today’s high wheat prices pull Northern Plains farmers to forsake their ever-expanding corn and soybeans empires for the good old days of wheat?

Hold that thought — until at least next year — when the first peek at a possible answer arrives with the U.S. Department of Agriculture’s Prospective Plantings Report March 31.

Remembering

This year must not slip away, however, without remembering Sen. Robert Dole, the stalwart Kansas Republican, who slipped away Dec. 5 at 98. Dole, a true war hero, was a Capitol Hill fixture from 1960 until 1996 when he resigned his safe, comfortable U.S. senate seat to try the most dangerous, least comfortable thing ever, run for president.

He lost, and the nation lost something along with him. Thereafter, politics were different; they became bloodier, more corrosive and more destructive. After his death, some pinned part of the blame on Dole, a lion-tough leader who had a ferocious roar and slashing bite. But, as he proved time and again, neither flaw matched his caring heart and ironclad integrity.

His career was built on easing hunger, reducing poverty, healing disabilities and delivering hope to millions in the U.S. and abroad. Let us end this dreadful year of bitter politics by remembering one of our best, Bob Dole, a wounded giant who always knelt to pick up the broken, hungry and poor.