Profitability of Corn Versus Soybeans

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Profitability of Corn Versus Soybeans

• Gary Schnitkey
• Agricultural Economist
• University of Illinois

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Outline

• Previous corn and soybean rotations
• 2009 corn minus soybean return projections
• Rotations

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FBFM Regions and Yields

• Note higher ratios for northern and
  central-high, important for profitability
  differences

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Corn Minus Soybean Returns (Per Acre)
Returns by region are in management section of
farmdoc (www.farmdoc.uiuc.edu) under Per Acre
Revenue and Costs for Illinois Crops
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2008 Projections

• Based on NASS yields adjusted for FBFM farms
• Difference in costs corn minus soybeans
• 5.40 corn price, 12.25 soybean price (USDA
  projections, midpoint of range)

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Corn Minus Soybean Returns (Per Acre)
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Corn and Soybean Return By Year
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2009 Projections

• Prices 5.60 for corn, 12.50 for soybeans,
  based on CBOT futures markets
• Yields (bushel per acre)

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Non-land CostsCentral Illinois -- High
2009 cost increases lead by fertilizer (Per ton
prices of 1,000 for Anhydrous, 1,000 for DAP,
and 900 for potash). Also large increases for
seed, crop insurance, fuel.
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2009 Corn Minus Soybean Returns

• Returns for corn still exceed soybeans by large
  margins

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• 2009 Projected Corn Minus Soybean Returns
• Based on 5-year average yields
• 5.60 corn price
• 12.50 bean price
• 208 corn minus soybean cost difference

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Operator and Land Returns by Percent Acres in Corn

• Average Operator and Land Returns for FBFM farms
  that
• Are in Northern and Central Illinois
• Receive most of their income from grain
  operations
• Have limited other farm activities
• Average returns by Percent Acres in Corn

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Operator and Farmland Returns by Percent Acres in
Corn
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Farm Returns by Percent Acres in Corn, 2006
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Costs and Yields, 2006
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Summary

• As grow more corn, controlling power costs is a
  key

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Crop Rotation Tool

• See FAST Crop Rotation Tool