US Corn & Soybean Operations

Part
01
of six
Part
01

US Corn Operations

US corn operations grossed approximately $52.6 billion between September 1st, 2018, and August 31st, 2019. In 2018, the average cost to produce a bushel of corn was above its average market value, resulting in a net loss of $4.2 billion in US corn operations.

Gross US Corn Operations Income

  • From September 1st, 2018 through August 31st, 2019, the United States produced 14.42 billion bushels of corn.
  • Over the same 12 months, the average price of corn was $3.648 per bushel.
  • This means that corn operations yielded a gross revenue of approximately $52.6 billion from September 1st, 2018 through August 31st, 2019.

Net US Corn Operations Income

  • From January 1st, 2018, to December 31st, 2018, the average price of corn was $3.71 per bushel.
  • With an average yield of 176.4 bushels per acre in 2018, each acre grossed approximately $652.68 worth of corn.
  • Illinois's average cost per bushel of corn was $4.003 in 2018.
  • Given that Illinois's cost of living index is 93.4 and the other top 9 corn-producing states have an average cost of living of 92.9, Illinois is likely a suitable representation of the approximate cost of US corn production.
  • At an average yield of 197 bushels per acre and a cost of 4.003 per bushel, the average cost per acre of corn in Illinois was $788.591.
  • Since the price of corn in Illinois is usually equal to or less than the average national price, each acre of corn in the state lost approximately $53.45 in 2018.
  • At an estimated loss of $0.293 per bushel and 14.42 billion bushels of corn produced from September 2018 to August 2019, corn operations in the US generated a loss of approximately $4.2 billion.

Corn Operations Expenditures and Recent Market History

RESEARCH STRATEGY

Research into grain indexes, USDA reports, and market statistics indicated that there were no pre-compiled sources detailing the gross income of US corn operations. For this reason, it had to be triangulated. This was done by first finding the mean price for a bushel of corn for the 12 months between September 1st, 2018 and August 31st, 2019. This number ($3.648) was then multiplied by the total US corn bushel production (14.442 billion) to get our answer ($52.6 billion).

In order to find the net income of US corn operations, the average price per bushel in Illinois for 2018 (4.003) was subtracted from the average gross income per bushel in that same year (3.71). After determining the net loss per bushel ($-0.293), the loss per acre ($-0.293 x 197=$-57.721) and national net loss ($-0.293 x 14,420,000,000=$-4,225,060,000) were found.

Cost of living of the other nine top corn producing states were found using the following calculation: (90.1 + 90.8 + 101.6 + 90 + 99.8 + 89 + 97.3 + 87.1 + 90)= 835.7/9 = 92.8888888.


Part
02
of six
Part
02

US Soybean Operations

About $37.2 billion and $40 billion, in total gross income, was generated from soybean operations in the United States in 2018 and 2019, respectively.

U.S. Soybean Income

  • The total gross income from soybean operations in the United States for 2018 was about $37.2 billion, according to the United States Department for Agriculture (USDA).
  • Corn and soybean accounted for the "largest U.S. commercial crops in terms of both value and quantity," representing more than 40% "of all U.S. crop receipts in 2018."
  • IBISWorld reports that the total revenue generated from soybean operations in the US was approximately $40 billion in 2019. "Gross income is the revenue generated from a business's sales or an individual's labor."
  • The average net cash farm income (NCFI) from soybeans operations in the country amounted to $102,400 in 2019, a 33.5% change from 2018.
Part
03
of six
Part
03

Gross Income for Small and Mid-sized Soybean Farms.

Gross income for small and mid-sized Soybean farms in the United States is estimated to be $3,885,004,908, and $5,910,832,416 respectively, both aggregates to about $9,795,837,324.

Soybean Farm Businesses and Income Overview

  • The Economic Research Service (ERS) classified small-sized farms as those with annual gross cash farm income (GCFI) of less than $350,000 while mid-sized as those with GCFI between $350,000 and $999,999.
  • In 2018, gross income for small-sized soybean farms in the United States is triangulated to be about $3,885,004,908.
  • Gross income for mid-sized Soybean farms in the United States is estimated to be approximately $5,910,832,416 as of 2018.
  • There were 29,009 lower-sales Soybean farms with an average income of $60,492 per farm as of 2018 in the United States.
  • In 2018, moderate-sales Soybean farms' average income was $240,972 and there were 8,840 moderate-sales Soybean farms.
  • The number of mid-sized Soybean farms in 2018 was 8,892 with an estimated average income of $576,228 per farm.
  • Non-family Soybean farms in the United States recorded an average income of $436,260 and there were 1,804 non-family Soybean farms in 2018.
  • According to the American Soybean Association, 90.1 million acres (36.5 million hectares) of Soybean farm were cultivated by US farmers in 2018.
  • The volume of Soybean produce in 2018 was 4.39 billion bushels.
  • In the United States, the total revenue (value) of soybean crops was estimated to be $41.01 billion as of 2018.

Research Strategy

While preexisting information on the gross income of small and mid-sized Soybean farms in the United States could not be found in the public domain or paid report after an exhaustive search through multiple sources including the United States Department of Agriculture (USDA), the Economic Research Service (ERS), American Soybean Association (ASA), IBISWorld, Market Watch. Your research team have leveraged publicly available data points on the United States Department of Agriculture (USDA) / Economic Research Service (ERS) database like the number of Soybean farms that are small and mid-sized based on their income, and the average income per farm to triangulate a proxy for the gross income for small and mid-sized Soybean farms in the United States as outlined below:

Gross Income (less than $350,000) for Small Soybean Farms.

Moderate-sales farms total income = number of farms * income per farms
Moderate-sales farms total income = 8,840 * $240,972 = $2,130,192,480
Lower-sales farms total income = number of farms * income per farms
Lower-sales farms total income = 29,009 * $60,492 = $1,754,812,428
Gross income for small-sized Soybean farms = moderate-sales farms total income + lower-sales farms total income
Gross income for small-sized Soybean farms = $2,130,192,480 + $1,754,812,428 = $3,885,004,908‬

Gross Income ($350,000 and $999,999) for Mid-sized Soybean Farms.

Gross income for mid-sized Soybean farms = non-family soybean farms total income + mid-sized farms total income
Non family soybean farms total income = number of farms * income per farms
Non family soybean farms total income = 1,804 * $436,260 = $787,013,040
Mid-sized farms total income = number of farms * income per farms
Mid-sized farms total income = 8,892 * $576,228 = $5,123,819,376
Gross Income for Mid-sized Soybean Farms = $787,013,040 + $5,123,819,376 = $5,910,832,416
Part
04
of six
Part
04

Gross Income for Small and Mid-sized Corn Farms.

Data specifically related to gross income for small- to mid-sized farms with an income of less than $5 million per year was not found after a thorough search. The research team was, however, able to triangulate data points related to production value and acreage value for farms with an income of less than $1 million, as detailed in the Research Strategy section below.

Helpful Findings

  • Income is increasing: The Economic Research Bureau reported that estimated Net Farm Cash Income for corn farms with an income of $350,000 or more was projected to be $206,400 in 2019, which is 20 percent higher than in 2018. Net Cash Farm Income does not account for changes in farm inventory, accounts payable, accounts receivable, and capital consumption, the Economic Research Bureau notes.
  • Most farms are small- or mid-sized: Family farms making less than $1 million in income a year account for 98 percent of all farms and produce 87.6 percent of industry production. This figure is not specific to corn production.
  • After triangulating available data for farm size, production, and value of production, the production value of family farms making less than $1 million a year producing corn was calculated to be $149,798 per farm. The calculations and full data points used are in the Research Strategy section.
  • After triangulating available data for average acreage and value per acre, the average corn farm will generate $298,812, with calculations and full data points available in the Research Strategy section.
  • Direct payments to farms from the government increased by 64 percent from 2018-2019 as part of the Market Facilitation Program in 2019, representing a total of $22.4 billion for all farmers. Each producer receives between $15 to $150 per acre to offset loss of profits due to trade markets.
  • Triangulating governmental aid with the average acreage size means that the average corn farmer can expect to receive between $6,660 and $66,600 depending on their location, with calculations available below.

Research Strategy

The research team began by searching federal sources such as the Department of Agriculture's Economic Research Service for data related to farm income and farm size for corn farms. Information that specifically related to income for small- to mid-sized corn farms was not available.

Research data from universities in agriculture-based states (such as Illinois University) was searched for crop-specific and farm-size specific data, but directly relevant information was not found.

The research team then sought to triangulate a response using data from farm types, production, and value, as detailed below.

Production Value of Family Farms (<$1 million in Revenue/yr) Calculated

  • Upon finding that family farms (not crop-specific) with less than $1 million in income generate 87.6 percent of industry production, the research team searched for data on the size of the corn market in 2019.
  • The USDA provides that the corn industry produced 13.692 billion bushels in 2019.
  • Price per bushel for corn was identified as $3.80 in 2019. Multiplying the number of bushels and the price per bushel generates a total value of production of $52,029,600,000.
  • As 87.6 percent of production is produced by farms with less than $1 million in income, the total value of production ($52,029,600,000) was divided by 87.6 to find an estimate of $44,745,456,000 in production value generated by said farms (with less than $1 million in income each).
  • With 98 percent of farms having less than $1 million in income, the research team then looked for data on the number of corn farms. The USDA's most recent data reports 304,801 corn farms in 2017. 98 percent of that figure is 298,705.
  • The calculated number of corn farms with less than $1 million in income is 298,705; the calculated production value of these farms is $44,745,456,000. By dividing the production value by the number of farms, a production value of $149,798 per farm was found.
To attempt a second point of triangulation based on average acreage size and value per acre, the research team searched for data from federal sources, as outlined below:

Acreage Value of Corn Farms Calculated

  • The average farm size in America (not specific to small- or mid-sized farms or corn farms) is 444 acres.
  • A Minnesota-based consulting firm, Russell Consulting Group, reports an estimated total revenue of $673 per acre for corn and soy beans in 2019.
  • The average corn farm in America will generate an estimated $298,812 (444 acres x $673) based on these numbers (which also include soy averages). The size of the farm dramatically affects the income of the farm and small- to mid-sized farms will have less of this share as a result of less acreage.

Value of Governmental Aid Calculated

  • The average farm size is 444 acres and the aid received per acre is between $15 and $150 per acre. Multiplying these figures produces a range of $6,660 to $66,600 for the average farm.








Part
05
of six
Part
05

Renting vs Owning Corn Farms

Sixty percent of corn farm acreage in the United States is rented. Over half (58.3%) of corn farms in the United States and over a quarter (77.2%) of corn acreage can be attributed to part owners in the United States. The cash rent for corn cropland in Iowa, the top corn-producing state, is $230/acre.

Ownership of Corn Farms in the US

  • Nearly 60% of corn-farming land (by acreage) in the United States is rented. Approximately a fourth of the rented acres were "share-based rental agreements".
  • In 2017, there were 364,301 corn farms in the United States, of which 117,212 farms (32.2%) had full owners, 212,333 (58.3%) had part owners, and 34,756 (9.5%) had tenants.
  • In 2017, there were 90,847,976 acres of corn farms in the United States, of which 11,079,843 acres (12.2%) had full owners, 70,163,306 (77.2%) had part owners, and 9,604,827‬ (10.6%) had tenants.
  • There are 252,190 (2017) corn farms in the United States with family or individual legal status.
  • There are 33,254 (2017) corn farms in the United States that are partnerships.
  • 28,951 (2017) corn farms in the United States are held by corporations, of which 27,541 are family-held corporations.
  • 5,571 (2017)corn farms are held by "estate or trust, prison farm, grazing association, American Indian Reservation, etc".
  • The average rent for corn, dryland was $145.5/ acre in 2015.

Farm Ownership in Top Corn Producing States

Farm ownership patterns in the top five corn-producing states by acreage share (includes all crops):

Iowa

  • 46% of farm acreage is owner operator type (i.e. "owned and operated by the farmer").
  • 12% of farm acreage is operator landlord type (i.e. "owned by farmers and rented to other farmers").
  • 41% of farm acreage is non-operator type (i.e. owned by non-farming landlords).
  • Rent per acre for cash-rent type cropland: $230/acre
  • Rent per acre for cash-rent type irrigated cropland: $235/acre
  • Rent per acre for cash-rent type non-irrigated cropland: $230/acre
  • 95% farms in Iowa are family-owned.

Illinois

  • 40% of farm acreage is owner-operator type.
  • 10% of farm acreage is operator-landlord type.
  • 50% of farm acreage is non-operator type.
  • Rent per acre for cash-rent type cropland (2019): $224/acre
  • Rent per acre for cash-rent type irrigated cropland (2019): $241/acre
  • Rent per acre for cash-rent type non-irrigated cropland (2019): $224/acre

Nebraska

  • 56% of farm acreage is owner-operator type.
  • 9% of farm acreage is operator-landlord type.
  • 35% of farm acreage is non-operator type.
  • Rent per acre for cash-rent type cropland (2019): $191/acre
  • Rent per acre for cash-rent type irrigated cropland (2019): $237/acre
  • Rent per acre for cash-rent type non-irrigated cropland (2019): $144/acre

Minnesota

  • 55% of farm acreage is owner-operator type.
  • 10% of farm acreage is operator-landlord type.
  • 35% of farm acreage is non-operator type.
  • Rent per acre for cash-rent type cropland (2019): $164/acre
  • Rent per acre for cash-rent type irrigated cropland (2019): $205/acre
  • Rent per acre for cash-rent type non-irrigated cropland (2019): $163/acre

Indiana

  • 46% of farm acreage is owner-operator type.
  • 12% of farm acreage is operator-landlord type.
  • 41% of farm acreage is non-operator type.
  • Rent per acre for cash-rent type cropland (2019): $194/acre
  • Rent per acre for cash-rent type irrigated cropland (2019): $238/acre
  • Rent per acre for cash-rent type non-irrigated cropland (2019): $193/acre

Ownership Pattern in the Midwest

  • The corn belt refers to the predominantly corn-growing areas in the midwestern region of the United States. It roughly covers "western Indiana, Illinois, Iowa, Missouri, eastern Nebraska, and eastern Kansas"
  • Midwestern region farm ownership patterns by acreage share:
    • Owner-operator: 53%
    • Operator Landlord: 9%
    • Non-operator Landlord: 37%
  • The midwestern region has the lowest rate of land ownership in the United States; farmland renting concentration is seen in Illinois and Iowa. The share of rented land varies from 60% in Illinois to 32% in Wisconsin.
  • Structure of non-operator landlord ownership in the Midwest by acreage share:
    • Individual: 47%
    • Partnership: 19%
    • Corporate: 8%
    • Trust: 22%
    • Other: 4%
  • The Midwest has large farmland parcels which are suited to trust ownership; trust establishments have high fixed running costs.
  • Corporate ownership at 8% is the lowest among other regions.
  • Rental agreement type acreage share in the Midwest:
    • Fixed cash: 72%
    • Flexible cash: 8%
    • Share: 19%
    • Free: 1%
  • The Midwest region has a slightly higher rate of flexible lease contracts.
  • Granular level data can be found here and here.

Research Strategy

In addition to national-level corn farming statistics, we have provided overall farming data (including crops other than corn) for the top corn-growing states and the Midwest region. Data has been provided from the U.S. Farmland Ownership, Tenure,
and Transfer report (2014) and the 2017 US Census of Agriculture (both latest reports of their kind), and the USDA database. Calculations for corn ownership structure by the number of farms and acreage have been shown below. All data, unless otherwise mentioned, is from 2014.

Calculations

Corn for grain ownership structure by the number of farms:
Full owners: 100,068
Part owners: 174,071
Tenants: 30,662
Total : 304,801

Corn for "silage or greenchop ownership structure" by the number of farms:
Full owners: 17,144
Part owners: 38,262
Tenants: 4,094
Total : 59,500

Corn farm (all) ownership structure by number of farms:
Full owners: 117,212 (32.2%)
Part owners: 212,333 (58.3%)
Tenants: 34,756 (9.5%)
Total : 364,301

Corn for grain ownership structure by acreage:
Full owners: 10,031,581
Part owners: 65,543,972
Tenants: 9,163,009
Total : 84,738,562

Corn for "silage or greenchop ownership structure" by acreage:
Full owners: 1,048,262
Part owners: 4,619,334
Tenants: 441,818
Total : 6,109,414

Corn farm (all) ownership structure by number of farms:
Full owners: 11,079,843 (12.2%)
Part owners: 70,163,306 (77.2%)
Tenants: 9,604,827‬ (10.6%)
Total : 90,847,976




Part
06
of six
Part
06

Renting vs Owning Soybean Farms

There are 303,191 soybean farms in the United States, 97% of which are family-owned. However, approximately 40% of soybean farms are rented out to farm operators.

Number of Soybean Farms in the U.S.

  • According to the 2017 U.S. Census of Agriculture, there are 303,191 soybean farms in the United States. This is an increase of 228 farms over the 302,963 soybean farms in 2012.
  • Of the 303,191 soybean farms, 100,939 have full owners and 170,079 have part owners. This means that a total of 271,018 farms or 89% are owned.
  • Just 32,173 of the 303,191 soybean farms in the U.S. have tenants, which means only 11% of soybean farms have tenants.
  • Soybean farmers harvested over 90 million acres of soybeans in 2017.

Most Soybean Farms are Family Owned

  • According to the U.S. Department of Agriculture, just over 97% of soybean farms in the United States are family owned.
  • In 2017, there were 241,593 family- or individual-owned soybean farms in the U.S. compared with 29,882 farms that were partnership-owned and 25,799 that were corporate-owned.
  • Of the 25,799 corporate-owned farms, 24,528 are family held and 1,271 are "other than family held."
  • Another 5,468 soybean farms are owned by estates, trusts, prisons, grazing associations, or are located on American Indian reservations.
  • Additionally, 24,096 of the family held corporate farms and 1,202 of the "other than family held" corporate farms have fewer than 10 stockholders.
  • The 2.4% of farms that are not family owned are considered corporate owned and half of corporate farms have "less than $35,000 in sales per year."
  • Despite the number of farms that are family-owned, only 60% are family-farmed. The other 40% is "rented out by non-farming landlords to other farm operators."

States with the Most Soybean Farms

  • Illinois has the most soybean farms of the 50 states, with 36,581 soybean farms. This represents 12% of the U.S. soybean farms.
  • Minnesota is next with 27,865 soybean farms. This represents 9% of the U.S. soybean farms.
  • Ohio is close behind in third with 25,636 soybean farms. This represents 8% of the U.S. soybean farms.

Rental Prices

  • In 2019, the average rental rate for soybean cropland was expected to increase by $30 an acre to reach $155 per acre for a 50-bushel yield.
  • However, rental prices vary significantly across the United States. In Iowa, for example, the average rental rate for soybean cropland in 2018 was $222 per acre and in Indiana, the average rental rate for soybean cropland was $210 per acre.

Research Strategy

All information was found in the U.S. Census of Agriculture and industry publications. Some calculations were performed to get percentages, including the following.
  • Full owners and part owners were added together to get total number of owners: 100,939 + 170,079 = 271,018. This number was then divided by 303,191 to get the percentage of farms that are owned (89%)
  • To get the percentage of soybean farms that have tenants, we divided 32,173 by 303,191 to get the percentage of farms that have tenants (11%).
  • To get the percentage of soybean farms that the top three states represent, we performed the following calculations:
Sources
Sources

From Part 04
Quotes
  • "Economic Research Service"
Quotes
  • "Average net cash farm income (NCFI) for farm businesses is forecast at $91,800 in nominal terms in 2019, up 19.5 percent from 2018. This would be the first annual increase after 4 consecutive years of declines."
Quotes
  • "Family farms (where the majority of the business is owned by the operator and individuals related to the operator) of various types together accounted for nearly 98 percent of U.S. farms in 2018. Small family farms (less than $350,000 in GCFI) accounted for 90 percent of all U.S. farms. Large-scale family farms ($1 million or more in GCFI) accounted for about 3 percent of farms but 46 percent of the value of production."
Quotes
  • "USDA estimated the U.S. 2019 corn output at 13.692 billion bushels vs. the trade’s expectations of 13.513 billion bushels and the USDA’s December estimate of 13.661 billion. "
Quotes
  • "Currently, the Office of Chief Economist is projecting a $3.80 price for 2019 (WASDE, October 2019). The $.19 per bushel higher price in 2019 will counter yield declines when calculating revenue changes."
Quotes
  • "According to the USDA’s once-every-five-years Census of Agriculture, the number of farms growing corn for grain fell from 450,520 in 1997 to 304,801 in 2017, while the number of corn farms of 2,000 acres or more rose from 868 to 4,097. "
Quotes
  • "While the average farm size has been increasing approximately two acres per farm each year since 2012, the number of farms is decreasing. Today, the average farm size is 444 acres."
Quotes
  • "The projected sales and cost analysis come from meetings with Midwest-based farmer clients and include 60,000 acres. Using projected average yields of 198 bu. corn and 59 bu. soybeans per acre, farms averaged $673 total revenue per acre and averaged $664 total cost per acre."
Quotes
  • "Direct government farm payments—which include Federal farm program payments paid directly to farmers and ranchers but exclude USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation (FCIC)—are forecast to increase $8.8 billion (64.0 percent) to $22.4 billion in 2019, following an additional round of payments from the Market Facilitation Program in 2019."
Quotes
  • "County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county."
From Part 05
Quotes
  • "95 percent of corn farms in America are family-owned"
Quotes
  • "It does raise an important question about the influence of restrictive farm ownership laws on future patterns of ownership, and whether impacts would show up in asset values via restrictions in market adjustments or via preferential demand in protected cases. In any case, varying restrictions do still exist in several states that represent an important share of the agricultural production in the upper Midwest and Cornbelt, including North Dakota, South Dakota, Oklahoma, Iowa, Minnesota, Wisconsin, Nebraska, Missouri and Kansas. "