Soybean yields a strategic issue
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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?

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Soybean yields a strategic issue

SOYBEAN YIELDS: A STRATEGIC ISSUE?

Gary Schnitkey

Agricultural Economist


In recent years corn has become more profitable than soybeans

In recent years, corn has become more profitable than soybeans


Main reason soybeans yields relative to corn yields

Main reason: Soybeans YieldsRelative to Corn Yields


Rolling 5 year average corn soybean yield ratios illinois

Rolling 5-Year Average Corn-Soybean Yield Ratios, Illinois


Central illinois high productivity budgets

Central Illinois (High Productivity) Budgets


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 IncreaseYield *

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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