Corn is seen to be more profitable than soybeans this year. But in the longer term view, planting more corn in 2013 would result to lower overall profits in the coming years. This is according to an analysis made by Gary Schnitkey, an economist from the University of Illinois.
He used 2013 corn prices of $5.70 and soybean prices of $12.80. He said that operator and farmland returns for central Illinois in 2013 are $643 per acre for corn following soybeans but only $571 for corn following corn because of a yield drag.
Soybean returns are $446 per acre for soybeans following corn but slightly higher at $471 for soybeans planted after planting corn for two years. Comparing Corn against soybeans in a one year context shows that corn will be more profitable.
Continuous corn will not be profitable each year. Schnitkey saw a $545 an acre return for corn/soybean rotation with an average of $643 return for corn following soybean and $446 return for soybeans after corn. He concluded that this was not the most profitable option.
With a corn/corn/soybean rotation, the return would be $562 an acre or a $17 per bushel advantage. This rotation has an average of $643 return for corn after soybeans, $571 for corn after corn, and $471 for soybeans after two years of corn. The minimum return would be $525 an acre for continuous corn. If a yield drag is avoided, then continuous corn would be the most profitable.
For 2013, Schnitkey said that that corn following corn has returns of $571 per acre. It is $125 an acre higher than soybeans after corn. From 2006 to 2011, corn had an average of $58 per acre more profitable than soybeans in the state of Illinois.
The study assumes corn after soybeans with a yield of 198 bushels per acre, corn after corn with a yield of 188 bushels an acre, corn all the way with 180 bushels per acre, soybeans following corn with 57 bushels per acre, and soybeans following two years of corn with 59 bushels an acre.
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