Grain farm income forecasts for 2022 and 2023


Grain farmer incomes were above average in 2020 and 2021 and are projected to remain above average in 2022. For 2023, forecasts are for lower incomes due to higher costs and projected lower grain prices. There is a lot of uncertainty about 2023. Farmers have built up equipment and financial reserves to withstand the low incomes that will be inevitable at some point in the future.

Grain farm income history

Figure 1 shows the average net income on Illinois grain farms enrolled in Illinois Farm Business Farm Management (FBFM), an Illinois-operated cooperative education and farm records service. Annual income is the average of farms that derive more than 50% of their income from grain sales. Average farm size and length of service has changed over time as farms have grown. In 2020, the average farm size was 1,500 acres, with 20% of arable land owned.

Net agricultural income was at a high level in 2020 and 2021. In 2020, the median farm income was $225,000 per farm, the third-highest median income, surpassed only by $274,000 in 2011 and $298,000 in 2012, which are record levels. Higher earnings in 2020 and 2021 contrasted with median earnings from 2014 through 2019 when net earnings averaged $78,000 per farm.

Grain farm income in 2021 was strong mainly due to above trend yields and historically high grain prices. In 2021, Illinois farmers earned an average of $5.90 per bushel for corn and $13.40 for soybeans. Both corn and soybean prices in 2021 were well above the 2014-2020 average: $3.65 for corn and $9.64 for soybeans. In addition, government payments in 2021 were small. Costs started to increase, but many farmers have yet to see significant increases in fertilizer and other expenses in 2021.

Grain farm projections for 2022 and 2023

Projected median income for 2022 is $350,000 per farm, $96,000 less than 2021 levels. Prices used in 2022 projections are $6.40 for corn and $14.00 for soybeans. These prices from 2022 are significantly higher than the actual prices from 2021:

  • The 2022 corn price of $6.40 is $0.50 higher than the 2021 price of $5.90 and
  • The soybean price of $14.00 is $0.60 higher than the 2021 price of $13.40.

Higher raw material prices were more than offset by cost increases. From 2021 to 2022, nonland costs increased by over $120 per acre for corn and $100 per acre for soybeans (see Figure 1 of farmdoc dailyAugust 2, 2022).

Earnings of $81,000 per farm are forecast for 2023, a forecast close to the 2014-2019 average of $78,000 per farm. Returns in 2023 are trend estimates. The costs are expected to continue to rise. The prices used in the forecasts are $5.50 per bushel for corn and $13.00 per bushel for soybeans, which is still high by historical standards but below 2022 prices. Given the higher cost structure, prices above $5.00 per bushel for corn and $12.00 for soybeans are now required to break even (farmdoc dailyDecember 21, 2021).

Financial condition of farms

Farmers have typically made capital investments in their farms during this period of higher incomes. Average capital purchases on grain farms were $164,000 in 2020 and $229,000 in 2021. The 2020 value was a record level and the 2021 value surpassed this 2020 record level (see Figure 1). Farmers typically make larger capital purchases in higher-income years and then scale back purchases in lower-income years. For example, capital purchases were lower in 2014-2017, a lower-income period, than in 2011-2013, a much higher-income period (see Figure 1). When incomes inevitably fall, many farmers will have built up equipment reserves and will be able to scale back their capital purchases.

Farmers have also built up their working capital, as the current ratio shows. The current ratio is current assets divided by current liabilities, with higher values ​​indicating more current assets relative to current liabilities. In 2021, the current ratio was 3.32, the highest since 2000 (see Figure 2). The ratio for 2021 surpassed the previous high of 2.83, set after the high-income 2012.

Current assets consist primarily of cash and marketable securities, prepaid expenses and grain stocks, grain stocks being valued at year-end market prices. Potential future declines in grain prices will necessarily reduce working capital and the working capital ratio. Even given this factor, farmers are currently in a strong position.

The ratio of debt to assets has also fallen in recent years. Leverage was at a relatively low level of 21% in 2021. The debt-to-asset ratio averaged 18% in 2012 (see Figure 3).

Overall, debt-to-asset ratios have been at relatively low levels in recent years, with rising assets playing a significant role in the low debt-to-asset ratio. Debt per hectare has increased over time and is expected to increase again in 2023 as high costs on many farms will require larger operating loans. Still, debt-to-asset positions are relatively strong.

The above shows average values ​​for all grain farms in Illinois. Some farms will have fewer financial reserves. For example, younger farmers tend to have higher debt-to-asset ratios and lower current ratios than an older cohort. Going forward, farmers with higher debt could face additional adversity as interest rates have risen.


Grain farm incomes were above historical averages in 2020 and 2021, and forecasts point to another year of above-average incomes in 2022. This income is due to relatively high commodity prices. In addition, farmers have used this period of higher incomes to build up equipment and financial reserves.

Projections assume a return to lower incomes in 2023. Obviously, much remains to be seen before incomes are realized in 2023. Higher returns are possible with a combination of higher yields and sustained 2022 price levels. However, the current fall bids for 2023 point to lower prices, likely based on expectations of relatively good yields in South and North America. As always, there is a lot of uncertainty about earnings a year ahead.

However, it can be expected that grain farm incomes will return to lower levels in the future, as is always the case in agriculture. Higher costs will result in lower revenues even with corn and soybean prices at historically high levels. Prices below $5.00 a bushel for corn and $12.00 for soybeans will result in low income if not matched by higher yields or cost reductions.

Nevertheless, farmers are in an excellent financial position and will continue to improve their financial position in 2022. Farmers are preparing for lower incomes that are inevitable in farming.


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