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West central IL | At the end of the day, the math is:
Total gross revenue
-expenses to grow a crop
-rent
= as close to zero as the local BTO wants to cut it.
So if you start with 250 bu corn at $4.50, you’ve got $1125 to work with. I don’t feel like getting into a peeing contest about machinery, crop inputs, fuel etc so let’s just pretend it costs about $500 to pick an arbitrary number. That leaves you $625 an acre to make a little money and pay the rest to the landlord. Well same equation works at 125 bu corn. You gross $562.50, probably a bit more since your yield goal is less. But obviously instead of $500+ rent, you’re at $100 rent.
NOW what happens with $3 corn. You still gross $750 on the 250 bu ground and can pay some rent. Well all the sudden that 125 bu ground is under water even at free rent, and that’s where a $43 dollar subsidy comes into play. $43 is icing on a much bigger cake on productive ground, whereas on marginal ground it has you thinking should I risk paying inputs and buying machinery to plant this stuff. | |
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Does anyone have statistics on how many farmers actually want disaster payments and subsidies?
