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$100/acre crop production cuts recommended

Top Story IconA farm management specialist says farmers will be wise to look at $100 an acre production cuts to manage lower corn and soybean prices in 2016.

Gary Schnitkey with the University of Illinois has calculated $100 worth of cuts to avoid large losses on cash rent farmland. The bulk of the cuts, he tells Brownfield Ag News, will need to come from cash rents, but that’s going to be tough, “Most farmers – and landowners – realize that there’s less revenue out there but landowners, obviously, don’t want to see their rents decline and it’s going to be a tough negotiating year.”

So then, he says, farmers will have to look at lowering more of their input costs.

“If we don’t see any price declines can we see phosphorus and potassium and nitrogen levels cut? Do we really need all the technology that are in these seeds to get the yields? And, machinery purchases have to be cut to zero or a bare minimum.”

Schnitkey says the $100 cost cut per acre is not an over reaction to current low prices. He says prices will go up, but, “We would have to see substantial increases on the demand side or yield problems some place in the world.”

AUDIO:  Interview with Gary Schnitkey:

FarmDoc – Cutting $100 an acre in corn and soybeans costs

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