Wheat budget for 2027 to 2029: which price to write down

North Dakota State University’s 2026 budget for spring wheat in the northwest of the state, at 43 bushels an acre and $5.67 a bushel, ends in a loss of $33.73 an acre. A lease of 500 acres at that budget loses $16,865 in one season, before any bad year. So before you sign a lease, a machine or a loan, write a budget for the next three seasons. Give each a low, a likely and a high price and yield, with a source and a date. Sign only if your cash reserve covers two low seasons in a row.

Can a price forecast close the budget?

No. Price and yield move more from one season to the next than costs do, so they decide most of what is left, and no forecast gets either right. A three-season budget is what you expect to sell, spend and keep in each of the next three seasons, written before planting.

In it, yield is the bushels you harvest per acre, and price is what you are paid per bushel. Costs are what you spend to grow the crop: seed, fertilizer, chemicals, fuel, repairs, insurance, interest, machinery and land. What is left is sales less costs. The NDSU budget calls its last line the return to labor and management.

On a US soybean acre, the value of production changed by 13.0 percent a year on average from 1998 to 2025, and operating costs by 6.5 percent. For Illinois corn from 1975 to 2011, price accounted for about 66 percent of the variation in revenue, on county figures. Professional forecasts miss too: USDA’s first forecast of net farm income each year came in about 8.5 percent below the final figure from 1975 to 2016.

NDSU says the same about its own numbers. Its yield is the average of 2018 to 2024 with the lowest and highest years removed, and its price is the best estimate of NDSU Extension economists. The document calls the budgets a guide and urges each farmer to develop a budget of their own. It adds that a budget serves long-run decisions only when sales and costs are realistic for several seasons.

So take NDSU’s wheat acre as the likely scenario and write the other two around it. Spend your budgeting time on the price and yield lines, not on the detail of costs.

How do you write the three scenarios?

A scenario is a price and a yield you assume for one season. Write a low, a likely and a high, each with its source and its date. The low one comes from a season you have already lived: your poorest yield in recent years and the lowest price you were paid. Neither figure is invented, so nobody can call the low scenario pessimism.

Three figures beat one, because a single figure leans one way. At three Illinois meetings, corn farmers asked for their average yield as one number said 7.6 bushels more than the county average. When they answered in ranges, the overstatement went away.

The example farm has 1,000 acres of its own and is offered 500 more, rented for three seasons at $39 an acre, the average cash rent in the NDSU budget. The likely scenario is NDSU’s: 43 bushels at $5.67. The low scenario, 36 bushels at $5.00, and the high one, 48 bushels at $6.50, are invented for the example. A real farm takes them from its own records. Listed costs are $277.54 an acre in every scenario, $39 of it for land. An owned acre pays no rent, so its cost is $238.54.

NDSU leaves out the federal PLC and ARC payments. If you expect them, add them as a line of their own, with a source. Take the yield from each field’s yield, year by year and the price from a weekly price record with a source. Season one carries the same figures as your single-season budget, with its break-even price and yield, and the likely price should match the one in your written selling plan.

Can the farm carry the rent through two bad seasons?

Run the whole farm, with the new commitment, through two low seasons in a row, and see whether your reserve covers what is missing. A commitment is anything you sign and must pay even in a bad season: rent, a machinery payment, a loan payment. The reserve is the cash you hold, or the credit already approved, that pays the shortfall.

For the example farm, take a low season, a low season and a likely season, in that order. The reserve is $150,000, invented for the example.

With the rented acres, the farm needs $214,620 to get through two low seasons; alone, $117,080. A reserve of $150,000 covers the second figure and not the first. Over the three seasons the 500 acres cost the farm $114,405.

What is left does not yet pay for family living or principal on debt, so take those out first. If your reserve does not cover the shortfall, take fewer acres, stretch the payments or build the reserve before you sign. Each rented acre adds $195.08 to the shortfall of two low seasons, so this farm has room for 168 acres. That is a recommendation.

Does fertilizer need a line of its own?

Yes, in seasons two and three. Fertilizer is $83.25 of the $277.54 listed on the NDSU wheat acre, 30 percent, and its price can jump in a single year. NDSU prices nitrogen at $0.58 a pound; write the price per pound you expect for each season, with the date.

In a year when fertilizer jumps, costs can rise faster than sales. In 2022, by the same USDA files, operating costs on a corn acre rose 46.9 percent while the value of production rose 23.9 percent. On soybeans, fertilizer per acre rose 91.7 percent.

Give fertilizer a low and a high figure in seasons two and three. On the example acre, fertilizer 30 percent dearer costs $24.98 more. The likely owned acre falls from $5.27 to a loss of $19.71, and the likely rented acre from a loss of $33.73 to a loss of $58.71.

Which price goes beside the first budget line?

Write season one first, with the three scenarios and the source and date of each. Then close it after harvest. At each close, put the budget beside what came in and split the gap into a price miss and a yield miss. The price miss is the difference in price times the bushels you harvested. The yield miss is the difference in bushels times the budgeted price.

The example farm harvests 39 bushels and is paid $5.40, both invented for the example.

Write both misses each season, with the date you wrote the budget and the date of the close. Read the price miss beside your sales made against the written selling plan: if you sold as planned, the miss came from the market; if not, part of it came from your selling decisions.

After a few seasons, write beside next year’s likely price how much, on average, you were paid under or over budget per bushel. Shift the likely figure by that much, or write down why not. Wait for two closes before shifting anything, because one season on its own may have been only a drought. That is a recommendation.

Other articles on budgeting are in the planning library. For one crop and one season, see the profit per acre you write before planting.

• Write a low, a likely and a high price and yield for each of the next three seasons, each with its source and date
• Take the low scenario from a season you have already lived
• Work out what is left per acre in each scenario
• Run the whole farm, with the new commitment, through two low seasons in a row, and sign only if your reserve covers the shortfall
• Give fertilizer its own line, with a low and a high figure, in seasons two and three
• At each close, split the gap into a price miss and a yield miss, and after two closes correct the likely figure or write down why not

The same column, the budget beside what came in, works for any other line of farm management.