Breakeven Corn-After-Corn Yields and Yield Drags

Breakeven Corn-After-Corn Yields for Differing Prices

 

Projected corn and soybean prices impact breakeven corn-after-corn yields. Table 2 shows breakeven corn-after-corn yields for differing corn and soybean prices, given costs and yields typical of northern Illinois. Breakeven yields decrease as corn price increase. Breakeven yields decrease as soybean price decreases.

Historical Breakeven Corn-After-Corn Yields Relative to Soybean Yields

For northern Illinois, the 161-bu. breakeven corn-after-corn yield is 3 times the 54-bu./acre projected soybean yields. The 3 ratio is low compared to historical ratios. From 2000 to 2010, the corn-to-soybean break-even ratio has averaged 3.3 (see Figure 1), meaning the corn yields had to be 3.3 times higher than soybean yields to break even. This current relatively low ratio suggests that market signals are favoring corn production over soybean production.

 

Summary

Break-even corn-after-corn yields for 2012 are presented in this paper. These break-evens corn-after-corn yields are between 24 and 35 bushels lower than corn-after-soybean yields. The 2012 break-even corn yields relative to soybean yields are low from a historical perspective. While farmers are questioning whether to continue with as much corn-after-corn, market prices and costs suggest corn is relatively more profitable than soybeans from an historical perspective.

Tables courtesy University of Illinois.

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