Farmers are venturing into fields to plant this week. And while most planting decisions have been made, relative changes between the prices of soybeans and corn over the past few weeks have led some farmers to rethink their planting intentions.
The USDA-NASS projected Nebraska farmers would plant 10.5 million acres of corn and 5.1 million acres of soybeans. However, the soybean-to-corn price ratio has widened since the first of the year making it more attractive to plant soybeans. At the beginning of the year, soybean prices in central Nebraska were 2.35 times corn prices. On April 14, the ratio had widened to 2.53 times. As such, there is an expectation there will be a marginal shift in acres nationally from corn to soybeans.
Source: The Van Trump Report, Kevin Van Trump, April 17, 2020, @KevinVanTrump
Based on the mid-point per bushel cost estimates from the UNL 2020 Crop Budgets, 2018 statewide average yields, and central Nebraska, April 14, cash bids for October delivery, irrigated soybeans would return slightly better than irrigated corn, $-23/acre compared to $-30/acre, and dryland soybeans would return much better than dryland corn, $-50/acre compared to -$129/per acre.
The above estimates use statewide average costs and yields. Farmers should use their own yields and projected costs when examining alternatives. There are several factors farmers should consider if examining a switch from corn to soybeans. A listing of a few of these factors can be found here: https://www.nefb.org/newsroom/economic-tidbits/2574-considerations-for-corn-soybean-planting. Every farming operation is unique, and whether it makes sense to switch acres will differ among operations. The numbers suggest if farmers have flexibility, it might be worth consideration.