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Why soybeans can trump corn
Most farmers who know their numbers say it costs $100 to $250 less per acre to grow a soybean crop, compared to corn.
Even then, most Midwestern budgets favor growing corn where possible. That's because 180-bushel corn at $5 per bushel is $900 gross income per acre, and 50-bushel soybeans at $12 a bushel is $600 gross income per acre.
Drought can change this, however.
Some farmers will hedge their 2013 crop-mix decisions to the last minute, depending on spring soil moisture, says Tracy Blackmer, director of the Iowa Soybean Association's On-Farm Network. “If it's still dry, they'll plant more soybeans to save some investment dollars,” he says.
Soybean perks include less investment for inputs like fertilizer, says Ross Weikel, head of soybeans in North America for Syngenta. “Soybeans also require less water than corn,” he says. Weikel points out that soybeans aren't as prone to falling over as corn. Greensnap and weakened stalks from disease and insects can flatten corn.
Seth Naeve, University of Minnesota agronomist, thinks more soybeans should be considered a part of your long-term risk-management strategy.
“In some years, there's no question that continuous corn gives the best chance for high returns,” he says. “But then you have a year like 2012, when you were better off to have soybeans in the rotation. With high land prices and the high cost of growing corn, soybeans offer a more stable return at lower input costs. With the future unknown as to weather conditions and markets, continuous corn may not be the best way to manage risk.”
Mike Schrum, a farmer and agronomist for West Central Cooperative, Grand Junction, Iowa, sees some farmers in his area hedging on fertilizer applications for 2013 until it's closer to planting time.
“Budgets I've seen still favor corn for next year — by $150 an acre or more,” he says. But you don't have to move many bushels from one crop to the other to change the budget advantage —10 bushels less corn and 5 bushels more soybeans could do it.
He also points out that long-term corn yield trends have added about 3 bushels per acre per year, while soybeans have added about 1 bushel per year, which is another nudge for corn.
If good management boosts soybean yields to 2 or 3 more bushels per acre per year, there's an advantage to soybeans. That's because 2 bushels more soybeans is worth more than 3 extra bushels of corn, he says. Schrum believes intense soybean production practices — better varieties, better pest control, more fungicides, fertilizer — have that potential.
2013 seed supply
If you plan to plant more soybeans, check your company's seed supply. The 2012 drought could impact supplies.
“We are confident we can deliver,” says Weikel. Supply may be tight with some varieties, but Syngenta is confident of its overall soybean seed supply, he says.
You may pay more for some soybean varieties than in 2012. “Most of the overall price increases (for Syngenta) are due to new product launches,” says Weikel. “If you look at the majority of our varieties, prices will be relatively flat compared to 2012.”