- USDA’s price projections for all crops except double-crop soybeans are above the breakeven prices, but prices will continue to be volatile as harvest nears.
FOLLOWING USDA's crop report this week, Tennessee cotton has moved from the lowest-return crop at average yields to the highest-return crop considering estimated record yields for the state.
Prices and yields have been updated after the Aug. 12 USDA Supply & Demand report.
This August USDA report estimates yields based on producer surveys. For Tennessee, the estimated yields are above average with corn at 146 bushels per acre, cotton 979 pounds per acre, soybeans 42 bushels per acre and wheat at 68 bushels per acre. Grain sorghum yields are not reported for Tennessee.
The mid-point of USDA’s price projections are $4.90 bushel corn, 80-cent pound cotton (or 88 cent with seed rebate, etc.), $4.60 bushel grain sorghum, $11.35 bushel soybeans and $7 bushel wheat. With an increase in yields, these mid-points for USDA’s price projections for all crops except double-crop soybeans are above the breakeven prices. Prices will continue to be volatile as harvest nears, producers should look closely at pricing opportunities.
Breakeven prices are calculated at Aug. 12 USDA estimated yields and the specified costs including variable, land and fixed cost. Prices will vary depending on location and buyers. The biggest change this month in Tennessee is the resurgence of cotton on the estimation of Tennessee record yields and strong prices. It has moved from the lowest return crop at average yields to the highest return crop considering estimated record yields. All crops will need a good fall harvest period to achieve projections.
To read more on this and to see the table showing breakeven prices and yields for major Tennessee row crops in 2013 or to see a chart to help plan now for 2014, go here.
Danehower is a University of Tennessee farm management specialist.