A Challenge Can You Make Money Selling Crops at the Loan Rate

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A Challenge:. Can You Make A Profit Selling Grain at the. Loan Rate? By: David Bau, Regional Extension Educator. Erlin J Weness, Professor Emeritus …

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A Challenge:
Can You Make A Profit Selling Grain at the Loan Rate?
By: David Bau, Regional Extension Educator
Erlin J Weness, Professor Emeritus 8/2006
Robert Anderson, CFM
If want to stay in business and compete either with your neighbors or with farmers in other countries, producing crops for the loan rate or less may be required. Can you do it in a year of average yields?
Most farmers will say that they can’t produce corn for $1.83 or soybeans for $4.93 per bushel and make any money. These prices are the 2006 loan rate prices offered in Nobles County, Minnesota. Others are actually keeping their costs of production below the loan rate and still others are willing to think “outside of the box” and try to do it. It is almost a certainty that those who can consistently keep their yields high and their costs low will be the last ones standing as agriculture continues to sift out the least efficient.
In 2005, the average farmer in the Southwest Minnesota Farm Business Management Association (SWMFBMA) spent $382 to produce an acre of corn on cash rented land. That includes $350 of direct…

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