(West Lafayette, IN) - Planting soybeans might be a good bet for farmers undecided whether to raise soybeans or corn this year.
Prices for corn and soybeans are expected to remain strong, but the cost of raising soybeans is projected to be much less because of skyrocketing fertilizer prices.
The cost of producing corn, which requires more nitrogen, could increase by as much as 25-percent compared to 15-percent for soybeans if fertilizer prices remain at current high price levels, according to farm economists at Purdue University during a February 10 webinar on the outlook for corn and soybeans.
“There’s going to be a lot of pressure for soybean acres to increase not only in Indiana but across the corn belt and in the United States,” said Michael Langemeier, Associate Director of the Center for Commercial Agriculture at the West Lafayette campus.
Jim Mintert, the Director of the Center for Commercial Agriculture, said things could change in the coming weeks due to market volatility. Right now, soybeans appear more favorable to plant than corn.
“I’ve been telling people the decision on corn versus soybeans is going to be fluid all the way up to the time planters roll. But, if you’re making a decision today, it certainly suggests, particularly in the high productivity soils, soybeans,” Mintert said.
Langemeier advised farmers to look at their budgets more often and rework the figures, if necessary, to reflect what’s been rapidly changing input costs when deciding if they should plant corn or soybeans.
He said net farm income in 2022 because of corn and soybean prices remaining strong would be similar to the high-profit margins farmers enjoyed in 2021 if not for rising production costs over the past several months.
“Even with these high costs, we’re looking at some very strong net farm incomes,” Langemeier said.
For the past several months, Mintert said he encouraged farmers “not to throw the towel in on corn.” Now it appears the pendulum has swung further in favor of soybeans.
“That’s shifted quite a bit. The market has awakened to the fact that we need soybean acres in 2022, and the market is trying to encourage or stimulate more planting of soybeans than what we were encouraging earlier,” Mintert said.
Mintert said farmers should also keep an eye on the production of corn and soybeans in South America in deciding which crop to plant.
He said yield projections by some farm agencies for corn in countries like Brazil and Argentina are down noticeably because of inclement weather.
Mintert said USDA has dropped its projection somewhat for corn but still forecasts record yields from the continent.
“Most of the private forecasts that have been made available in recent days have been well below that depending on the source, but, clearly, there’s an expectation that we’ve seen some yield reductions on the corn crop,” Mintert said.
Prices could be impacted worldwide by a sizable loss in yields from South America being a major export of corn.
“The market is paying really close attention to what’s going on in South America and I think it’s going to behoove all of us to pay pretty close attention going forward,” Mintert said.
Mintert believes a similar impact on yields from the weather on soybeans in South America could have a similar effect on worldwide prices because the continent is a major producer of soybeans. There are projections soybean yields from parts of South America could be as low as 2017 and 2018.
“If that happens, that really tightens supply on a worldwide basis,” Mintert said.