Let's face it, 1998 was a rough year for soybean farmers. OK, the national average yield was around 40 bu/acre, the second-highest ever, but low prices kept the crop from being very profitable.
In the South, where a season-long drought reduced yields by a third or more, soybean farmers really took a whipping.
What's in store for '99? And what should Southern farmers be thinking about as they consider how many acres to plant next spring?
No doubt, some of the keys to the price outlook depend on factors that farmers can't control, like how much the South Americans produce or if the Asian economic crisis is over. However, there is a place to start when assessing whether soybeans can be produced profitably - the enterprise budget.
What's an enterprise budget?
It's basically a listing of the anticipated gross revenue (based on assumed price and yield levels), the various cost inputs and the final bottom line or profit. The idea is for farmers to use such a budget and put their costs alongside the appropriate categories to determine potential profitability for the coming season.
To demonstrate, consider the above '99 enterprise budget, which was designed by Clemson University ag economists. It's for full-season soybeans in South Carolina.
Based on the assumed prices, yields and costs, there isn't much optimism for producing soybeans in '99. However, when examining the various out-of-pocket expenses, the following factors should be considered for making this budget "leaner" and the farmer "meaner."
1) Seed. Although seed accounts for only 10% of the operating budget, farmers should plant good-quality seed of top-performing varieties. Choosing those with the appropriate disease resistance is important, too.
To save a few dollars, base the seeding rate on the desired number of plants per row foot rather than on pounds per acre. Overplanting causes lodging and increases the potential for late-season diseases.
Paying attention to seeding rate is most important with herbicide-resistant varieties, since they're moreexpensive. In addition, the use of a seed treatment fungicide to help protect germination and emergence is cheap insurance (less than $1.50/acre).
2) Fertilizer and lime. The importance of having the optimum soil pH and adequate nutrients for top yields cannot be overemphasized. That being said, there are some key pointers for farmers to consider.
The first is that every field should be soil sampled each year, preferably in the fall. Lime and fertilizer application rates should be based on those results and not on nutrient uptake tables for various yield levels, speculation, or whatever amounts a neighbor used.
In the enterprise budget on the opposite page, 27% was assigned to a variable costs category (based on 50 lbs of P and K and 1/3 ton of lime per acre). If soybeans follow a highly fertilized cotton or corn crop, and since soybeans are excellent feeders on residual nutrients, there's a chance top yields can be produced without any fertilizer.
Also, in the sandy Coastal Plains soils of the Southeast, where leaching of nutrients is a problem, research has shown that recommended K rates for the crop can be cut in half. That is, if subsoil samples from the top 4" of the clay layer come back with a high or very high rating for K, and the farmer does a good job of deep tillage, for example, subsoiling.
Looks like time spent on a little more sampling may pay off in 1999.
3) Weed-control management. When adding the costs for herbicides, surfactants, application and cultivation, the overall impact of weed management is significant - around 20% of total variable costs. Even though the price of some herbicides has come down, most are still expensive when broadcast at label rates.
Roundup Ready systems are attractive, but farmers should factor in at least two applications of Roundup Ultra on most fields, and not forget the seed technology fee. Also, to broaden the weed spectrum controlled, especially with weeds like morningglory, there may be a need to tankmix Roundup with something like Classic or Blazer.
As more farmers drill soybeans with conservation tillage, the benefits of crop competition and crop rotation play a more important role in the weed picture. It's also more important than ever that herbicide selection be based on the weeds present.
In fact, weed management is an area much like nutrient management. That is, each field on the farm likely has a different requirement. The days of shotgun weed-management systems are over. Each field's weed spectrum must be analyzed and a management scheme designed and implemented for maximum cost-effectiveness.
4) Machinery and labor. There's little doubt, especially in the South, that soybean growers are making unnecessary trips across the field. Tillage trips, for example, take time, cost money, increase soil compaction, reduce soil moisture and uncover weed seed that will likely germinate.
What trips can be cut out?
As the trend toward conservation tillage continues to grow, more farmers are benefiting from fewer tillage trips, and their soils' potential for productivity is increasing. In addition, drilling reduces weed problems and increases yield potential.
The one tillage trip necessary for sandy soils in the Southeastern Coastal Plains is for breaking soil hardpans so that roots can grow into the clay and access residual moisture and nutrients. With the new winged plows now available (for example, Paratill, Terra-Max and Ecolo-Till) a more broadcast type of deep tillage is possible, with 70%-plus of the surface residue remaining undisturbed.
5) Miscellaneous. Other cost categories vary in significance by field and farm. Insect management costs can be a factor, but are highly variable by year and field. Scouting is suggested, especially after first bloom.
Watching each field closely for pod-feeders like corn earworms and stinkbugs is extremely important. Allowing beneficial insects to build and help with control is a potentially significant cost-cutting practice for Southern soybean farmers.
However, as with all the cost-cutting suggestions above, the overall management for each field must be improved. By studying research results from your land-grant university and/or USDA-ARS, using information from agribusiness, getting help from your extension agents and specialists, and attending meetings and field days, you can become a leaner and meaner manager in '99!