Soybeans Looks More Profitable Than Corn In 2014

Inside Dakota Ag

Given current crop price projections and input cost estimates, 2014 may be the year to grow more soybeans.

Published on: November 9, 2013

Move over corn. Soybeans may be more profitable than in 2014. And wheat may be a contender.

In South Dakota State University’s early crop budgets, soybeans look as if they will be more profitable than corn given current market price projections and input cost estimates, says Jack Davis, South Dakota State University farm management specialist.

Using a projected corn price of $4.15 per bushel and projected soybean price of $10.80 per bushel, returns to management and labor favor soybeans, Davis says.

With direct costs estimates for corn at $385 per acre and total costs estimated at $608 per acre, the returns to labor and management are $15 an acre for corn.

Using direct costs for soybeans of $190 [er acre and total costs at $415 per acre, the returns to labor and management are estimated to be $71 per acre acre.

.

Corn

Soybeans

Price

$4.15

$10.80

Yield

150

45

Gross Revenue

$623

$486

Direct Costs

$385

$190

Return over direct costs per acre

$238

$296

Total Costs

$608

$415

Return to Management & Labor

$15

$71

The two key costs for each crop are seed and fertilizer. Seed and fertilizer expenses as a percent of revenue are at 38% for corn and 20% for soybeans, Davis says.

“With lower commodity prices and near constant costs compared to the past four years, returns to labor and management are projected below levels realized during that time,” he says.

Fertilizer costs are the most variable category from year to year and prices have trended lower for fertilizer during 2013.

Corn on corn is not as profitable as compared to past years, Davis notes.

 If a farm experiences yield drags with continuous corn, crop rotations may offer a profitable alternative. The price and yields used in these budgets favor soybeans, also giving incentives to use crop rotations.

To achieve the greatest return, management time should be spent on cost control and best management practices of key input items, Davis says.

NDSU hasn’t come out with its crop budgets for North Dakota yet. But there is talk that soybeans will likely show more profit potential than corn. Wheat will likely be far more competitive with corn or soybeans than it has been for many years, too.