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Interest rates. Something to ponder on a Saturday night
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Posted 9/21/2014 10:43 (#4085535 - in reply to #4084996)
Subject: RE: Interest rates. Something to ponder on a Saturday night


Clay SEIA - 9/20/2014 21:44

kagen - 9/20/2014 21:18This info is from Iowa State http://www.extension.iastate.edu/agdm/crops/pdf/a1-21.pdf. In '80 avg. COP in Iowa was 303, avg yield was 115 bu and avg. COP was 2.64 per bu. In '14, avg COP is 782, avg. yield was 177 bu and avg. COP is 4.43 per bu. Avg price in '80 was 1.80 and currently it is +- 2.75. Using these figures, farmers in '80 were 84 cents per bu under COP and 1.68 per bu under COP currently.


I would like some further verification on where they came up with an average of $1.80 for 1980 price.  Futures low for the '79-80 marketing year was $2.56, and $2.88 for '80-81.  If anything, the price of corn today in relation to inputs is FAR worse.  


 



Cal. yr. avg price for corn in 1980 was $2.70. This would equal an inflated price of $7.80 per bu. If you took 1980 avg. yield of 91 bu. per acre that would be the equivalent of a 2014 gross per acre of $709.

1987 was $1.56 equal to $3.27 in 2014 dollars. With the avg of 119 bu per acre the 2014 gross would be $390 with STUR much higher than today. So we are basically selling our corn for 1987 prices with a STUR of nearly double, inputs of nearly triple or quadruple or 6X on some and interest at less than half. Pick your poison.
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