Farmers Weekly Review

Would you bend over to pick up a penny? How about 2 or 3? Is a penny today worth as much as it was in 1982, my first year of farming?
This begs the question, which I will try to answer: How does a corn farmer make money? Another simple question, that a quick Google search could probably answer, what is the average rate of inflation for the last 4 decades of my farming career?
When I started farming in the 1980s, there were many years that the price of corn at harvest was under $2/bushel. A great yield back then was 150 bushels per acre. Using simple math, with a harvest population of 28,000 ears per acre and a 150-bushel yield, it took 186 ears of corn to be threshed in the combine to become a bushel of shelled corn. At the cash price of $1.80 a bushel for corn, that meant every ear of corn was worth a single penny (.00967 to be exact).
I remember bending over in the field many times back then to pick up any loose or errant ears of corn that were on the ground that did not make it into the combine. Last night, the cash corn bid was $4.69/ bushel. The cash corn bid is the current price an elevator is paying if you deliver to them that day. This year, I plan to harvest 32,000 ears per acre and expect 200 bushels per acre for an average yield. The math says that each ear of corn is now worth 3 pennies (.0293 to be exact). A quick calculation about inflation on a website shows that the penny in 1982 has increased in value almost 3-fold to become worth $.0319 today.
That means the value of an ear of corn in my farming career has almost kept up with inflation. Using some very fuzzy math, I calculate that if I want to make $50,000.00 growing corn, I will need to harvest 1.66666 million ears, or 52 acres with a harvest population of 32,000 ears. That is indeed fuzzy/deceptive math.
This is making the false assumption that every 3 cents from an ear of corn is profit. There are substantial costs to growing a corn crop. The cost to produce each ear of corn is variable among every farmer, based on the amount they spend on rent, machinery, labor, debt and many other input costs. What does each farmer spend to produce an ear of corn worth 3 cents? Is it 2-1/2cents, 2.8cents, 2.9 cents, or even in some cases, 3.1 cents or 3.5 cents? Unfortunately, sometimes you break even and some years, you actually lose money.
Inflation took its toll the last several years as fuel, fertilizer and pesticide prices rose much faster than the average inflation rate. The best way to combat rising costs to keep the cost of production down is to increase yields, if Mother Nature cooperates.
If after deducting expenses, I determine I only make 1/8th or 1/16th of a penny from each ear of corn, how many acres would I need to harvest to make $50,000?
This is too much math for me to continue and risk a headache today. However, this does explain how a farmer that grows corn hopes to make money. The goal is to grow as good of a crop as possible and sell each ear of corn for a tiny bit more than it cost to produce it. You want to grow as many and as big of ears as you can per acre.
Yesterday, while working on my combine outside of the shed, I saw a penny on the ground. Without hesitation I bent over to pick it up. Too bad it wasn’t an ear of corn; it would have been worth 3 times the effort.