Weathering the Storm of Low Prices on Bushels of Corn

Prepare a Successful Ag Business With the Right Resources and Expertise

With the varying costs of corn (with incremental increases to nearly $3.75 a bushel in late 2018), the question inevitably must be answered: How do I weather the storm of low costs per bushel of corn?

In order to effectively weather the storm of low corn costs (they were at $3.50 just a month ago and haven’t really gotten out of this $3 range in four years), farmers must be able to assess where they are at financially in each season, so that they can make the most out of every acre and every sale. 

The first way to make this happen? 

You must be able to calculate exactly what you’re paying, per acre, for crop input. Without this number, you’ll never be able to determine what you need to break even. At current bushel prices, you’ll likely need to harvest nearly 200 bushels of corn per acre to break even. 

And once you know your costs of operation and planting? 

Once you know what you’re paying to plant each acre of corn, and what dollar amount you need to reach to pay your expenses, you must also be able to answer the following question: 

What price per bushel do I need to get a reasonable return on my investment?

Turning a profit is an altogether different conversation. It requires an assessment of your operation, your equipment, and your sales process. But the majority of the conversation has to do with your marketing efforts. 

What are you doing to market your harvested corn? How far out have you been marketing? Are you getting stuck with excess “inventory” that you’re having a hard time moving? Who have you aligned yourself with to effectively sell your product? 

As you consider what it will take to make corn a profitable business for you, these questions matter. It matters that you’re accurately assessing your input costs. It matters that you know what numbers you must reach to be profitable, and it matters how you market your crops. Each detail of the operation matters for making you successful, from when you buy your seed to how you manage your equipment. 

And that’s why First Independent Bank is here. For over 100 years, we’ve partnered with farming operations throughout central and southern Minnesota, helping them build successful Ag businesses with the right resources and expertise. 

Talk to an expert today to help you make the most out of your ag business.

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