{"id":3793,"date":"2025-02-19T13:28:07","date_gmt":"2025-02-19T19:28:07","guid":{"rendered":"https:\/\/agrilife.org\/agecon\/?p=3793"},"modified":"2025-02-19T13:28:07","modified_gmt":"2025-02-19T19:28:07","slug":"examining-the-2025-corn-and-sorghum-budgets","status":"publish","type":"post","link":"https:\/\/agrilife.org\/agecon\/examining-the-2025-corn-and-sorghum-budgets\/","title":{"rendered":"Examining the 2025 Corn and Sorghum Budgets"},"content":{"rendered":"<div id=\"attachment_3794\" style=\"width: 493px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-3794\" class=\"size-landing-template-thumbnail wp-image-3794\" src=\"https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Corn-483x272.jpg\" alt=\"Picture of corn\" width=\"483\" height=\"272\" srcset=\"https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Corn-483x272.jpg 483w, https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Corn-560x315.jpg 560w, https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Corn-350x197.jpg 350w\" sizes=\"auto, (max-width: 483px) 100vw, 483px\" \/><p id=\"caption-attachment-3794\" class=\"wp-caption-text\">Corn on Tuesday, Sep 17, 2024, in El Campo, Texas. (Michael Miller\/Texas A&amp;M AgriLife)<\/p><\/div>\n<p>The <a href=\"https:\/\/agecoext.tamu.edu\/resources\/crop-livestock-budgets\/\">2025 crop and livestock budgets<\/a> are available on the Texas A&amp;M AgriLife <a href=\"https:\/\/agecoext.tamu.edu\">Extension Economics website<\/a>.\u00a0 In today\u2019s post, we break down the District 1, District 2, and District 3 corn and sorghum budgets and discuss what they imply about feed grain production in 2025.<!--more--><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h3>Master Marketer is Coming to Lubbock<\/h3>\n<p>Before I dive into this year\u2019s corn and sorghum budgets, I want readers to know that the <a href=\"https:\/\/agecoext.tamu.edu\/programs\/marketing-programs\/master-marketer-program\/\">Master Marketer Program<\/a> is coming to Lubbock, TX on February 27 and 28. \u00a0Master Marketer provides intensive training in many marketing-related skills.\u00a0 An important step in maintaining a profitable farm business is writing and implementing a marketing plan. \u00a0If you\u2019re a producer and struggle with this part of managing your operation, I encourage you to attend Master Marketer and add some new skills to your \u201ctoolbox\u201d.\u00a0 You can register online at <a href=\"https:\/\/tx.ag\/MMLubbock2025\">https:\/\/tx.ag\/MMLubbock2025<\/a>.\u00a0 The fee to register is $50.\u00a0 For more information about the workshop, contact the following extension specialists:<\/p>\n<ul>\n<li>Mark Welch: <a href=\"mailto:jmwelch@tamu.edu\">jmwelch@tamu.edu<\/a>, (979) 393-0891<\/li>\n<li>Andrew Wright: <a href=\"mailto:Andrew.wright@ag.tamu.edu\">wright@ag.tamu.edu<\/a>, (806) 746-6101<\/li>\n<li>Emmy Kiphen: <a href=\"mailto:emmykiphen@tamu.edu\">emmykiphen@tamu.edu<\/a>, (979) 393-0890<\/li>\n<\/ul>\n<h3>Projected Costs and Returns<\/h3>\n<p>This year\u2019s projected revenues and variable costs for corn and sorghum enterprises in the Texas High Plains and Rolling Plains are listed in Table 1.\u00a0 Variable costs in 2025 should be close to last year.\u00a0 How variable costs change varies from budget to budget, with some enterprises showing a small decrease in costs and others showing a small increase.\u00a0 However, most budgets estimate variable costs within one percent of 2024 values.\u00a0 The same can\u2019t be said for revenues this year.\u00a0 On average, revenues in 2025 are projected to be about ten percent less in 2024 because of lower commodity prices.\u00a0 As a result, we expect net returns from feed grain enterprises to fall in 2025.<\/p>\n<div id=\"attachment_3798\" style=\"width: 634px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-3798\" class=\"size-full wp-image-3798\" src=\"https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Table-1.png\" alt=\"A table reporting revenues and variable costs for feed grain enterprises\" width=\"624\" height=\"207\" \/><p id=\"caption-attachment-3798\" class=\"wp-caption-text\">Table 1. Feed Grain Revenues and Variable Costs in 2024 and 2025<\/p><\/div>\n<p>Table 2 compares net returns from feed grain enterprises in 2024 and 2025. While most enterprises continue to show a positive return over variable costs, those returns are significantly less this year.\u00a0 Only three budgets project a positive return over total costs.\u00a0 As you consider this information, remember the rule of thumb for economic decision-making.\u00a0 Focus on returns above variable costs if you have already incurred fixed costs.\u00a0 If an enterprise can cover its variable costs of production, you are better off producing something and using the revenue you earn to pay at least part of your fixed costs.<\/p>\n<div id=\"attachment_3799\" style=\"width: 634px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-3799\" class=\"size-full wp-image-3799\" src=\"https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Table-2.png\" alt=\"A table reporting net returns from feed grain enterprises\" width=\"624\" height=\"222\" \/><p id=\"caption-attachment-3799\" class=\"wp-caption-text\">Table 2. Feed Grain Net Returns, 2024 and 2025<\/p><\/div>\n<h3>Breakeven Prices in 2025<\/h3>\n<p>One important value to be aware of in an enterprise budget is the commodity\u2019s breakeven price.\u00a0 This is the price at which you can expect revenue to exactly equal costs, given the expected level of production in the budget.\u00a0 Table 3 lists the prices necessary to break even on both variable costs and total costs for corn and sorghum enterprises in Districts 1, 2, and 3 in 2025.<\/p>\n<div id=\"attachment_3800\" style=\"width: 634px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-3800\" class=\"size-full wp-image-3800\" src=\"https:\/\/agrilife.org\/agecon\/files\/2025\/02\/Table-3.png\" alt=\"A table reporting break even prices for feed grain enterprises\" width=\"624\" height=\"274\" \/><p id=\"caption-attachment-3800\" class=\"wp-caption-text\">Table 3. Breakeven Prices for Feed Grain Enterprises, 2025<\/p><\/div>\n<p>Normally, the risk of loss is greater when a commodity\u2019s breakeven price is close to its expected price.\u00a0 Using sorghum silage in District 1 as an example, the expected yield in the budget is 20 tons and variable costs are $684.47\/acre.\u00a0 Given this yield and variable cost, this enterprise breaks even on variable costs at $34.22\/ton.\u00a0 At this yield and the budgeted total cost, this enterprise breaks even on total cost at $45.47.\u00a0 The expected price in the budget is $46\/ton, so this enterprise should easily break even on its variable cost.\u00a0 On the other hand, $46 is very close to the break-even price for total costs.\u00a0 If either price or yield is even a little less than expected, sorghum silage may not break even on its total costs.<\/p>\n<h3>Final Comments on the Budgets<\/h3>\n<p>The numbers in these budgets are general guidelines for corn and sorghum enterprises and will not represent every operation perfectly.\u00a0 To build a budget that represents your operation, you can use the following options:<\/p>\n<ul>\n<li>Producers in District 1 can access a Crop Profitability Analyzer, sponsored by Texas Corn Producers, by clicking <a href=\"https:\/\/agecoext.tamu.edu\/resources\/decisionaids\/\">here<\/a>.<\/li>\n<li>District 2 producers access a similar decision tool, sponsored by Cotton Inc., at <a href=\"https:\/\/southplainsprofit.tamu.edu\/\">https:\/\/southplainsprofit.tamu.edu\/<\/a>.<\/li>\n<li>AgriLife Extension Agricultural Economics offers tools to help you <a href=\"https:\/\/agecoext.tamu.edu\/resources\/crop-livestock-budgets\/build-your-own-budgets\/\">build your own budgets<\/a> on our website.<\/li>\n<\/ul>\n<p>Keep in mind also that the outlook for commodity prices and some input costs is still not yet fully formed.\u00a0 The actual prices and costs seen this year may be very different from what the budgets predict.\u00a0 Make sure you have a plan established to manage risks related to production and prices this year.\u00a0 To keep up to date on the latest cotton marketing information, make sure to check out Dr. Mark Welch\u2019s <a href=\"https:\/\/agecoext.tamu.edu\/programs\/marketing-programs\/grain-marketing\/\">grain marketing website<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 2025 crop and livestock budgets are available on the Texas A&amp;M AgriLife Extension Economics website.\u00a0 In today\u2019s post, we break down the District 1, District 2, and District 3&#8230; <span class=\"read-more\"><a href=\"https:\/\/agrilife.org\/agecon\/examining-the-2025-corn-and-sorghum-budgets\/\">Read More &rarr;<\/a><\/span><\/p>\n","protected":false},"author":2184,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_crdt_document":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[31,23,18,27,29],"tags":[],"class_list":["post-3793","post","type-post","status-publish","format-standard","category-business-management","category-corn","category-crops","category-risk-management","category-sorghum","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Examining the 2025 Corn and Sorghum Budgets - Ag Economics on the Plains<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/agecon\/examining-the-2025-corn-and-sorghum-budgets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Examining the 2025 Corn and Sorghum Budgets - Ag Economics on the Plains\" \/>\n<meta property=\"og:description\" content=\"The 2025 crop and livestock budgets are available on the Texas A&amp;M AgriLife Extension Economics website.\u00a0 In today\u2019s post, we break down the District 1, District 2, and District 3... 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