Corn or Soybeans – What to Plant on Those Undecided Acres?

If you still have acres to be planted that are in the undecided category for planting to corn or soybeans, it would helpful to analyze your profit potential. The following is a quick look at the contribution margin (gross revenue minus variable expenses) using OSU Extension Enterprise Budget numbers and up-to-date forward cash bids for October ’07.

The first set of analyses examines 2nd Year Corn versus Soybeans with higher priced N ($580/ton NH3). The analysis on the left assumes 2nd Year Corn with a 10% Yield drag. The analysis on the right assumes a 5% Yield drag for second year corn. The Operating Expenses include nothing for land, machinery, labor and management. If corn does incur more costs for machinery, labor and management on your farm the Corn “Advantage” may have to be higher to offset these higher fixed costs.

Be sure to incorporate your own costs and commodity prices into this type of analysis as your numbers will almost certainly be different from the ones we have in our analysis. And be sure to accurately assess relative yield potential on the parcel in question. This will be very important in the analysis. 180 bushel 2nd Year Corn versus 55 bushel soybeans certainly would change the analysis (full analysis available here: https://bpb-us-w2.wpmucdn.com/u.osu.edu/dist/9/29991/files/2010/08/corn_soyanalysis.pdf)

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