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SOYBEAN YIELDS: A STRATEGIC ISSUE?. Gary Schnitkey Agricultural Economist. In recent years, corn has become more profitable than soybeans. Main reason: Soybeans Yields Relative to Corn Yields. Rolling 5-Year Average Corn-Soybean Yield Ratios, Illinois.

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soybean yields a strategic issue

SOYBEAN YIELDS: A STRATEGIC ISSUE?

Gary Schnitkey

Agricultural Economist

acres for different rotations corn beans in 2004
Acres for Different Rotations(½ corn – ½ beans in 2004)

--------- Rotation --------

1/2 - 1/2 2/3 – 1/3

2005

corn after beans 50% 50%

corn after corn 0% 17%

soybeans 50% 33%

2006 and years after

corn after beans 50% 33%

corn after corn 0% 33%

soybeans 50% 33%

economic returns
Economic Returns
  • In 2005, economical to grow corn-after-corn versus soybeans
  • In 2006, 1/2 corn – 1/2 soybeans higher

1/2 corn – 1/2 beans = $171

= .5 x $197 corn-after-beans + .5 x $144

beans

2/3 corn – 1/3 beans = $163

= .33 x $197 corn-after-beans + .33 x $149

corn- after-corn + .33 x $144 soybeans

sensitivity analysis
Sensitivity Analysis *

% Corn-After- Soybean Return

Corn Yield Loss Decrease (per acre)

0% -$34

5% $7

10% $44

15% $83

* Soybean return decrease for more corn than in ½ corn – ½ soybean rotation to be profitable (i.e., long-run)

break even soybean yields
Break-even Soybean Yields

Corn Soybean Soybean

Yield Cost Increase Yield *

173 0 41

173 $15 44

173 $30 47

173 $50 50

180 0 43

180 30 49

* Soybean yield for ½ - ½ rotation to remain optimal given previous budgets, this slides corn-after-soybean yield and soybean cost increase

profitability differences
Profitability Differences
  • Evidence that some farms have higher corn enterprise profits than other farms and vice versa
  • See fefo 05-01
summary
Summary
  • Some concern that soybean profits have not kept up with corn profits, largely due to yields. Soybean rust plays into concerns
  • Some farms may be looking at decreasing soybean acres, not uniform across farms or regions
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