Perfect storm for more soybeans
If there was a winner among crops grown in the drought of 2012, it was soybeans. So says Steve Johnson, Iowa State University Extension farm management specialist, who sees soybean plantings turning around beginning in 2013. He calls it a “perfect storm” of events that will bring more soybeans planted across the Midwest and into the Plains just west of the Corn Belt.
“Farmers don’t forget drought years quickly,” he says. “For at least the next three or four years, they’ll be making decisions on the 2012 experience,” he predicts.
One of those will be to plant more soybeans on soils that don’t have a lot of water-holding capacity, like the western Corn Belt and Plains. In a dry year, soybeans do relatively better on those soils, as happened in 2012. On speaking engagements, Johnson has heard the “more soybeans” story from farmers out West. Interestingly, when he made that point in Illinois, farmers there told him the same thing: Late August rains made a decent soybean crop -- better than the corn.
“They’ll be planting more soybeans, not because of the economics, but because of the recent experience. I can make the case that we might plant 80 million to 82 million acres to soybeans in 2013 [up from 77 million last year].”
There are definitely cautions to that, he adds. Your crop insurance options may be more attractive for corn than soybeans. Many APHs (actual production history) favor corn. As an example, with a corn APH of 185 bushels or higher, corn insurance guarantees may be as high as $1,000 an acre, while the soybean guarantee for 45 bushels might be closer to $500.
“On fields with very high cash rents of $400 an acre and higher, you just about have to grow corn to assure you can cover your costs,” Johnson says.
He says you should think early about your soybean marketing plan, and perhaps get some price protection before everyone realizes that soybean acres are trending up significantly in 2013.