Soybeans come in a poor second compared to corn in Ohio State University's initial crop budget analysis for 2013. The spreadsheet used by Barry Ward, Extension production business management specialist, plugged in sales values of $6.24/bu. for corn and $13.20/ bu. for soybeans. Land was the largest single cost, at $250/acre. For corn, fertilizer was second, at a total of $193.99 based on NH3 at $900/ton, MAP at $670/ton and potash at $640/ton. Seed cost was $111.56.
Ward ran four yield scenarios. Return over variable costs for corn came in at $405/acre at a 126-bu. yield to $717/acre for 190 bu., compared with $264 for 37-bu. beans to $474 for 55-bu. beans. Return over total costs was $92 for 126-bu. corn to $285 for 190 bu.; $2 for 37-bu. beans to $101 at 55 bu.
At the same time, the soybean/corn price ratio offered by November/December 2013 futures is only 2.14, also favoring corn. The market is putting its eggs in the South American crop basket, expecting the world balance sheet to ease in 2013.
Wheat, at $8.45/bu., offers $271 over variable costs and $21 over total costs at 56 bu./acre to $452 and $91, respectively, at 84 bu./acre. In addition, baling wheat straw can add about $40 more return over all costs. While Ward didn’t include a double-crop budget, using these figures, a wheat/beans combination would ballpark to $535 over variable costs at the lower yields and $926 at the higher yields.
In comparing return over total costs, you would have to split the land charge, of course. In this simplistic comparison and using these assumptions, the double-crop alternative – where it is feasible – could add between $100 and $200/acre over variable costs compared with corn, depending on yields.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.