It appears early predictions that the next farm financial crisis is on its way might be coming true. Illinois farmers face big monetary challenges in 2024.

According to the Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, 2023 input costs per bushel in different regions of Illinois ranged from $5.68 to $6.42 for corn and from $12.90 to $14.43 for soybeans. Prices received by IL farmers for the 2023 crop dropped from $5.04 per bushel in September 2023 to $4.23 per bushel in Feb 2024.

In another analysis, experts at the University of Illinois forecast losses of $135 to $160 per corn acre on farms all over the state.

“It’s going to be a tough year. Input costs just keep climbing and prices keep declining. The problem is a basic supply and demand type problem, where farmers are using available technology to grow more corn per acre and be more efficient, but our market opportunities are not growing at the same rate,” said Jon Rosenstiel, a farmer in Pearl City, IL.

Corn demand factors are varied, but the biggest demand decline will hit farmers in the next several years, as the Biden administration pursues a significant increase in electric vehicles, literally driving liquid fuels and ethanol demand off a cliff.

The University of Nebraska-Lincoln shared analysis in July last year, saying:

Collectively, the top five corn-producing states (Iowa, Illinois, Nebraska, Minnesota, and Indiana) could stand to lose well over $100B in farmland value from corn acreage alone from a permanent 50% decrease in the price of corn. While the primary unintended consequence of more EV production and sales may be a dramatic decline in the value of farmland in the Midwest, such a decline in the price of corn would have profound implications for the financial viability of Midwestern farming operations and the nation’s food supply. In addition, rural businesses that rely on a viable agricultural sector would be negatively impacted, as would rural schools, because property taxes are the primary source of school funding.

Other demand impacts are declining corn and corn co-product trade opportunities, no new trade agreements, and governmental policies that limit the ethanol market.

High input costs for farmers are also an important factor in declining profitability. Costs to plant an acre of corn were higher in 2023 compared to 2022 in all regions of the state. Total costs per acre to produce corn increased from 10 to 14 percent, with non-land interest costs increasing the most statewide.

“Fertilizer and seed costs are getting out of control,” Rosenstiel said. “In the case of fertilizer, too few companies control the market with little to no oversight and as a result, farmers are left with input costs taking a larger percentage of the gross earnings of Illinois family farms.”

UIUC forecasts that while variable costs may decrease in 2024, interest and land cost projections increase. These two factors, considered with lower projected grain prices for 2024 due to decreasing demand, will lead to much lower returns for farmers.

“You have to squeeze every nickel that you can and try to be as efficient as you can, knowing that a profitable year is still up to Mother Nature in the end. The risk and reward equation has gotten out of balance. The farmer is buying all the inputs, taking whatever price is offered, and shouldering all the risk. There’s no one else willing to share in that risk anymore,” he said.