Corn and Soybean Budgets That Hold Up at the Bank
Ag lenders will pick apart a crop budget that assumes trend yields and ignores basis. Here's how to build one that survives the operating-loan conversation.
Heath Kellogg7 min read
Every winter, ag lenders sit through hundreds of crop budgets. The ones that get funded aren't the most optimistic — they're the most defensible. Every assumption ties back to a source the lender can verify.
Yields: three-year average, not last year's win
Use your rolling three-year APH by field, not the best year you ever had. If you want to bump a field for improved drainage or a new hybrid, note it as a separate line and explain it.
Prices: harvest futures minus real basis
Base revenue on December corn and November soybean futures at the time of your budget, minus your local elevator's typical harvest basis. If you have forward-priced bushels, show them separately at the actual contract price.
Inputs: line-item, not lump-sum
- Seed by hybrid, at the price you actually paid or booked.
- Fertilizer by product and rate, priced at your fall-fill or spring quote.
- Chemicals by pass — preemerge, postemerge, fungicide if applicable.
- Custom hire and cash rent as separate lines, not blended.
Cash flow, not just profit
A field can pencil profitable on paper and still starve you for cash in July. Layer a monthly cash flow on top of the crop budget so the lender can see when the operating line gets drawn and when it gets paid back.
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