University of Illinois Economists: High Input Costs Push 2027 Break-Evens Higher
Key Takeaways
- •University of Illinois economists project that high input costs will continue constraining farmer profitability into the 2027 season.
- •Projected 2027 break-even prices for an average Illinois farm are $4.92 per bushel for corn and $11.10 per bushel for soybeans.
- •Economist Gary Schnitkey expressed cautious optimism that 2026 and 2027 returns could top the previous three years but remain below average.
- •Economist Nick Paulson warned that potential positive margins depend on corn and soybean prices sustaining their recent run-up.
- •Input prices, including fertilizer and chemicals, hit historic highs in 2022 and have stayed elevated even as grain prices declined, pushing break-evens upward.
Input costs are likely to continue limiting farmer profitability into the 2027 season, according to two agricultural economists with the University of Illinois.
During a recent FarmDoc webinar, Gary Schnitkey said updated projections point to the potential for positive margins in 2027.
"We are cautiously optimistic that returns will be higher in '26 and '27 than in the previous three years," Schnitkey said. "I would still say we are still in a period of below average returns."
However, fellow economist Nick Paulson cautioned that this potential depends on corn and soybean prices sustaining their recent run-up. That dependency matters for farm financial planning, because break-even projections are a key benchmark lenders and producers use when setting cash-rent agreements and marketing plans for the coming crop year.
"Yields, I think, have really helped farmers in the last few years, given the prices we've been dealing with," Paulson said. "Our costs are growing at paces that are matching, if not exceeding, some of the yield increases that we're seeing through time, and so those break evens are creeping up."
According to Schnitkey, the projected 2027 break-even prices for an average Illinois farm are $4.92 per bushel for corn and $11.10 per bushel for soybeans. The trend of rising break-evens reflects the broader cost environment that has weighed on row-crop margins since input prices climbed sharply in 2022, when fertilizer, chemical, and other expenses rose to historic highs and have remained elevated even as grain prices retreated.
The webinar, hosted by the University of Illinois' FarmDoc program, is part of the institution's ongoing outreach providing crop budget and return projections to farmers. Schnitkey and Paulson are both long-time contributors to FarmDoc's annual crop economic analyses. Producers and analysts typically watch these annual projections for early signals on how cash rents, input purchasing decisions, and crop insurance coverage may shift in the seasons ahead.
Source: Brownfield Ag News
