After record-setting soybean crops two years in a row, U.S. farmers are expected to expand corn plantings and throttle back on soybeans this year. Unusually large soybean supplies are expected to weigh on market prices.
Economist Gary Schnitkey of U-Illinois says “there is a reasonable chance that soybeans will be more profitable again in 2016” in the heart of the Corn Belt, just as the oilseed generated better returns for the past three years. Since 2000, direct costs, such as seed, pesticide, fertilizer, storage and insurance, have increased substantially for corn, which always is more expensive to grow than soybeans, says Schnitkey at farmdoc daily. The difference is projected to be $201 an acre this year.
Against that are gross revenue for corn and soybeans, which Schnitkey says could be $760 an acres for corn and $541 for soybeans, a difference of $219 – close to the difference in direct costs per acre. For his calculations, Schnitkey used common yields for central Illinois and likely prices for each crop this year, $3.80 a bushel for corn and $8.87 for soybeans. While corn had a slight advantage in central Illinois, where corn yield are high, soybeans would be more profitable in northern and southern Illinois.