Midwestern farmers will likely generate higher incomes in 2011 from growing corn compared to soybeans, says Gary Schnitkey, University of Illinois (U of I) agricultural economist. Schnitkey’s profit predictions follow from having projected corn and soybean budgets for December and then updating them again in late February.

“The big thing that has changed since December is that we’ve increased both the corn and soybean prices significantly,” he says. “Right now we’re projecting corn prices to average $5.50/bu. and soybean prices to average $13.40/bu. for the 2011 marketing year.”

Fertilizer prices and most other agricultural input costs have remained nearly the same as projected in December, says Schnitkey. “Anhydrous ammonia prices have gone up somewhat recently, but not like they did when heading into the 2009 cropping season,” he points out. “We’re projecting anhydrous ammonia costs to average about $780/ton in 2011, which is a lot less than the $1,000/ton farmers encountered in the fall of 2008.”

If crop prices continue trending significantly higher than production costs, farmers will likely profit well from either crop, he adds. “Projected returns for both corn and soybeans look to be very promising right now,” says Schnitkey. “It’s kind of like choosing between a Snickers Bar and a Milky Way – each has its own appeal. However, the returns from corn production are projected to be almost two times as high as the returns from soybean production this year – and that’s the case throughout the Midwest on all types of soils.”

Nearly double-money-incentiveto grow corn over soybeans could tempt some to switch their crop rotations to more corn-after-corn production, he points out. Yet, others may be hesitant to do so if basing their decision mainly on corn and soybean performance in 2010, Schnitkey adds.

In Illinois last year, many farmers had very good yields from soybeans and somewhat substandard yields for corn, points out Schnitkey. “2010 was sort of a breakout year for soybean production here,” he says. “I don’t know if that will happen again, but yields were pretty high with some of the new varieties that came out last year.”

Soybean growers truly had “phenomenal yields” here in 2010, confirms Vince Davis, U of I Extension soybean specialist. “It was a record year for Illinois soybean production and yields.”