Corn vs. Soybeans in a Delayed Planting Scenario – Profit Scenarios

Source: Barry Ward, OSU Extension

Wet weather and planting delays throughout much of Ohio and the eastern Cornbelt have many producers thinking about switching corn acres to soybeans or the taking the prevented planting option of their Multiple Peril Crop Insurance policy. Ohio had 9% of intended corn acres planted by May 19th which is far behind the 5 year average of 62%. Farms with pre-plant nitrogen or herbicides applied for corn production may have no option to switch to soybeans. Seed availability may also limit choice for some. Other factors, such as strict adherence to a crop rotation or landlord considerations may limit farmer choice when it comes to switching from corn to soybean plantings in a given year. Farm leases may contain specifications on crop rotations or even what crops may be grown. There may also be unwritten agreements between parties that limit the possibility of growing soybeans in successive years.

Producers that don’t have these limitations may be considering the option of switching acres to soybeans and it will likely come down to expected profit. Field by field budgeting is recommended and with delayed planting the yield expectations change as we move later into the growing season. What will be the likely yields for a given farm for the two crop choices? A recent article, “Delayed Planting Effects on Corn Yield: A “Historical” Perspective” is a good starting point in evaluating potential yield loss due to late corn planting: https://agcrops.osu.edu/newsletter/corn-newsletter/2019-12/delayed-planting-effects-corn-yield-%E2%80%9Chistorical%E2%80%9D-perspective

A recent article highlighting faculty in the College of Food, Agricultural and environmental Sciences always provides valuable insight into the possible yield swings related to late plantings of corn and soybeans: https://cfaes.osu.edu/news/articles/late-start-planting-might-not-hurt-yields-much

Looking at some simple scenarios may get your budgeting process moving for your own fields. These scenarios are based on the 2019 crop enterprise budgets available online at: https://farmoffice.osu.edu/farm-management-tools/farm-budgets

Scenario 1 – Yield prospects remain unchanged, new estimated revenue based on today’s markets:

Corn – 170.2 bu/a & 4.00/bu

Returns Above Variable Costs     $293

Soybeans – 51.5 bu/a & 7.90/bu

Returns Above Variable Costs     $207

Price changes in the last 3 weeks have been favorable to corn and shows some advantage to corn with these assumptions using OSUE Enterprise Budgets.

Scenario 2 – Corn yield 13% lower (per OSU Agronomy Guide, planting date 5-22 through 5-27), soybean yields remain unchanged, new estimated revenue based on today’s markets:

Corn – 148 bu/a & 4.00/bu

Returns Above Variable Costs     $227

Soybeans – 51.5 bu/a & 7.90/bu

Returns Above Variable Costs     $207

The choice becomes closer as we see corn still outperforming soybeans (barely) in Returns Above Variable Costs.

Scenario 3 – Corn yield 13% lower (per OSU Agronomy Guide, planting date 5-22 through 5-27), soybean yields 5% lower, soybean seed costs higher due to higher seeding rate (additional 30,000 seeds per acre planted) for late planted soybeans, new estimated revenue based on today’s markets:

Corn – 148 bu/a & 4.00/bu

Returns Above Variable Costs     $227

Soybeans – 48.9 bu/a & 7.90/bu

Returns Above Variable Costs     $175

This choice again favors corn as the lower soybean yield due to late planting and additional seeding costs make the choice of corn somewhat stronger compared to Scenario 2.

The recent announcements of another round of Market Facilitation Payments and changes to Prevented Planting Coverage due to the pending Disaster Aid Bill may add further complexity to this choice.

As planting is delayed further into June the potential lower yields of both corn and soybeans due to a later planting window will tend to favor soybeans. These simplified scenarios are just examples and farmers should budget for the different yield, price and cost combinations based on their own numbers.

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