SOYBEAN YIELDS: A STRATEGIC ISSUE?

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SOYBEAN YIELDS A STRATEGIC ISSUE?

• Gary Schnitkey
• Agricultural Economist

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In recent years, corn has become more profitable
than soybeans
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Main reason Soybeans YieldsRelative to Corn
Yields
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Rolling 5-Year Average Corn-Soybean Yield Ratios,
Illinois
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(No Transcript)
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Central Illinois (High Productivity) Budgets
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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

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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

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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)

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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

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Profitability Differences

• Evidence that some farms have higher corn
  enterprise profits than other farms and vice
  versa
• See fefo 05-01

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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