The impact of corn in 2013
Your planting decision may already have been made and the seed ordered. Whether that is the case or not, will you be planting more corn?
Corn is more profitable per acre than soybeans, and more profitable than most cropping rotations would average. However, agronomic problems with continuous corn have pushed many farmers to consider some spice in their life with a periodic change of crop.
While such considerations will have an impact on farm budgets, what happens with the value of crops nationally when more corn is planted or when alternative cropping patterns arise? Your personal decision is part of a national trend whether you know it or not.
If you have been penciling out your crop budget for 2013 and deciding what to plant not only for the coming year, but in successive years, you have noticed that corn is the money crop and provides more profit than soybeans in all combination of rotations. University of Illinois farm management specialist Gary Schnitkey says on high productivity farmland fall delivery prices will suggest the planting of corn when you compare returns to the operator and the farmland:
- $643 per acre for corn-after-soybeans,
- $571 for corn-after-corn,
- $525 for continuous corn
- $446 for soybeans-after-corn
- $471 for soybeans after-two-years-corn
- The lowest corn return – $525 for continuous corn – is $54 per acre higher than the highest soybean return – $471 for soybeans-after-two-years-corn.
Schnitkey says the problem facing farmers is starting the more profitable rotation. “If, for example, all farmland in 2013 is planted to corn, there will be no possibility of planting corn-after-soybeans in 2014 as there were no soybeans in 2013. Planting soybeans in 2013 allows for a 2014 planting of the most profitable corn crop, corn-following-soybeans.
Let's Look At Several Years
To adequately judge the financial value of a rotation, Schnitkey says a complete rotation has to occur with prices averaged over the course of the rotation. When that is done, a producer will receive:
- $545 per acre for corn-soybeans rotation (average of $643 return for corn-after-soybeans and $446 return for soybeans-after-corn).
- $562 per acre for corn-corn-soybeans (average of $643 return for corn, $571 for corn-after-corn, and $471 for corn-after-two-years-corn).
- $525 per acre for continuous corn.
Schnitkey says it is difficult to predict what farmers may do in 2013, “While planting corn in 2013 may be more profitable, it may require giving up returns in future years, as fewer acres of corn-after-soybeans can be planted in 2014. Which way farmers will go is an open question.”