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Production costs coming back into line

Production costs for corn and soybeans continue to come down.

Iowa State University (ISU) Extension farm management specialist Steve Johnson says when ISU releases its annual cost of production estimates this week, it will show a significant drop in those input costs.

“We’re going to make some adjustments in machinery and equipment. We’re going to lower our cash rent equivalent by about 12 percent. And the overall cost of production for growing corn and soybeans in 2017 is going to be around 12 percent less than it was last year,” he says.

Johnson says many farmers have already made those adjustments.

“I think farmers have the strong message. Reduce your cost of production and focus on the fixed costs, the big three—land, machinery and equipment, and family living,” he says, “and for those farms that have made those adjustments, I think these margins are much more attractive in 2017 than what we’ve seen the last couple years.”

Brownfield spoke with Johnson at a Farm Credit Service of America “GrowingOn” ag outlook meeting in Red Oak, Iowa, where he was the keynote speaker.

AUDIO: Steve Johnson