WEST LAFAYETTE, Ind. – Since many Midwest farmers have watched the optimum time come and go for planting corn, it may be time to trade in the corn seed for soybeans.
“By the time we get out to the end of May or the first of June, our estimates show that on average-quality soils here in Indiana, we could have $15-$20 an acre better returns from planting beans than corn,” said Chris Hurt, Purdue University agricultural economist. “The premium for planting soybeans over corn continues to grow, reaching near $35 per acre by June 10.”
Hurt stressed, however, that producers have to look at their specific conditions to make those decisions.
Yield analysis. Several factors play into a producer’s situation, such as expected yields for planting date, expected fall prices and respective costs. Based on several of those factors, Hurt said the break-even date for planting corn was around May 17.
In the analysis, corn yields are about three times that of soybean yields. However, after May 10, corn yields are projected to decrease by 1 percent per day that planting is delayed. As for soybeans, yields are estimated to fall 0.5 percent from May 21 to June 10 and then 1 percent per day for each day after June 11, Hurt said.
Beans after beans? Hurt said a major issue with so many soybeans is the potential yield reducing impacts of planting more beans on land that was planted to beans last year.
“For our analysis, we have assumed there would be a 10 percent yield reduction for acres that went beans on beans this year, and if you go heavy on beans in 2002, you also will have some beans on bean ground again in 2003,” Hurt said. “Therefore, we have assumed a 10 percent yield reduction on those beans on beans acres in 2002, as well as 2003, and assigned that as a cost back to soybeans this year.”
Market watch. Hurt assumes prices are going to be near the loan this fall in the analysis. New crop corn prices would be $2.02, while soybeans are estimated to be around $5.12 on average across the state.
Despite lower yield potential, one incentive producers could see in the next few weeks for planting corn is a price rally, Hurt said.
“There is still time to plant corn, but our evaluation – given that new crop corn prices are around $2 – says there is not enough economic incentive at this point to continue planting corn,” he said.
“If we are continuously delayed, the corn market needs to provide more incentive to encourage farmers to plant corn with stronger prices.”
Consider more than yield. Hurt also said agronomists are particularly concerned about diseases, weed problems and insect infestation that can come from not having a rotation for several years.
“Disrupting normal rotations can have serious consequences for all farmers, and they want to carefully evaluate the economics of the shift to soybeans on their farms,” Hurt said. “But economic returns may be even more critical, and the time has arrived to at least consider shifting to soybeans.”
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