Crop producers’ planting, management, and marketing decisions are guided by their understanding of production costs and market outlook. This article describes 2025 enterprise budgets and crop prices for Suwannee Valley peanuts and grain corn.
Enterprise Budgets
Farm enterprise budgets estimate production costs and potential returns for a crop or other farm enterprise. Actual costs and returns will vary from year to year and farm to farm. Ideally, crop producers estimate their expected costs and returns for each crop prior to planting. Budget templates with sample budgets for irrigated peanuts and grain corn are available on the North Florida Research and Education Center – Suwannee Valley website. Each budget workbook is designed to allow you to create a customized budget by crop or field. The budget workbooks are pre-populated with 2024-2025 cost data for machinery, seed, fertilizer, chemical, and other input items. To build a budget you can select items from dropdown menus or overtype with your own cost data. A budget summary sheet will update based on information entered in the other worksheets.
Sample budgets for Suwannee Valley peanuts and corn were prepared using assumptions about farming practices, yield estimates, recent input cost data, and price projections for 2025. Results indicate that Suwannee Valley producers are likely to have negative gross profit on corn. Peanuts appear more likely to be profitable, but at the initial contract price offered for 2025 ($500/ton) generating a positive gross profit will be challenging. For example, the sample budget for irrigated strip-till peanuts shows an estimated gross profit of negative $9 per acre without land rent or opportunity cost. The sample budget for irrigated, strip-till grain corn shows an estimated gross profit of negative $147 per acre. Sensitivity analysis shows how gross profit would vary depending on crop yield and price.
Despite negative expected gross profit, some producers will choose to continue to plant a crop, if crop revenues more than cover variable costs, and they do not have a better alternative. The sample corn budget showing expected gross profit of negative $147 per acre estimated a contribution margin (revenue minus variable costs) of positive $162 per acre. A positive contribution margin means that enough revenue is generated to cover all variable costs and some of the fixed costs that are unavoidable in the short run. Ideally, peanuts are rotated with another crop, such as corn or cotton. Planting peanut in consecutive years on the same land can lead to increasing pest pressure and declining yields. Planting corn in rotation with peanuts could be a rational choice as long as it generates a positive contribution margin and improves the likelihood that the peanut enterprise will generate positive gross profit.
Crop Prices
Local corn prices are often tied to the Chicago Board of Trade September futures price. Weekly quotes from three local buyers between March and August 2024 showed an average local basis of $0.73 per bushel above the September board. The September 2025 futures contract for corn traded at an average price of only $4.35 this past December. However, the USDA reported on January 10th that the 2024 U.S. average corn yield was below expectations (179 bu/acre compared to prior estimate of 183 bu/acre). That news put the Sep 25 futures contract on an upward trajectory, reaching $4.81 on February 18th. Strong exports and ethanol demand contributed to the upward trend in corn price. Strong demand could continue to pull the corn price upward, but traders are watching three factors that could potentially drag the price down: (1) Expectations of high corn acreage planted in the U.S. in 2025; (2) favorable growing conditions resulting in a large 2025 corn crop in Brazil, Argentina, or the U.S.; and (3) the possibility of tariffs on U.S. corn exports.
Whichever direction the corn price goes from here, an analysis of futures market data over the past 20 years showed that the September futures price is more often higher in all 11 prior months than it is in August (the main Florida harvest window). That suggests that Florida producers are better off, on average, when they lock in forward contracts. And it reduces their exposure to price risk.
Peanut contracts do not trade on a futures exchange, but USDA reports monthly prices received by producers. The average monthly price received by Florida peanut growers, September through December 2024, was $547 per ton. Discussions with two Florida peanut buyers found mixed views of the outlook for 2025. National average peanut yields were below trend the last two years, leading to tighter stocks and upward pressure on peanut prices. However, low cotton prices are creating concerns that we could see even higher peanut acreage in 2025. Increases in peanut acreage or yields above 2024 levels would put downward pressure on prices. The first 2025 contract offers announced in February for local runner-type peanuts were $500 per ton, below last year’s starting offer of $525 per ton. This reduction in peanut contract price suggests that peanut shellers are anticipating higher peanut production in 2025.
Acknowledgments
Amanda Phillips and funding from the Florida Department of Agriculture and Consumer Services (FDACS) for the Florida Stakeholder Engagement Program (Project leader: Dr. Vivek Sharma) helped support the work on production cost estimation and local corn price tracking.
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