At the time of this writing, the critical periods for determining corn and soybeans yields are near.

Unlike last year, weather conditions do not appear to be adversely impacting yields and near normal yields could occur.

Futures contracts are now suggesting prices for fall delivery near $5 per bushel for corn and $12 per bushel for soybeans. Given these prices and near normal yields, 2013 net incomes would be below those of recent years.

This is illustrated by simulating 2013 farm incomes.

Farm situation

Net farm income is simulated for the following farm designed to be representative of commercial grain farms in Illinois:

• The farm has 1,200 acres;

• Expected yields are 187 bushels per acre for corn and 54 bushels per acre for soybeans, with two-thirds of acres in corn and one-third in soybeans;

• The farm owns 120 acres, share-rents 360 acres, and cash rents 720 acres. This represents the typical tenure/rental situation for farms in northern and central Illinois;

• Cash rent is $300 per acre;

• Farm costs are specified at levels contained in 2013 crop budgets;

• The farm has $480,000 of debt.

Projected 2013 net farm incomes

Net farm incomes are projected for different yield-price scenarios. The first has yields slightly above average: 195 bushels per acre for corn and 58 bushels for soybeans. These yields are used under the presumption that weather conditions will be normal during the upcoming critical yield-determination periods.

Prices are near current cash bids for fall delivery: $4.80 for corn and $12.00 for soybeans. This will result in $146,000 of net farm income.