Market watchers often debate how the commodity markets must "buy" corn or soybean acres in any given year. In fact, price relationships may shift some last-minute acreage plans. But when you take into consideration all that goes into production, yield is the rotation trump card.

"Overall, relative yield increases favored corn production (in the last decade), while relative cost increases favored soybean production. Corn costs are higher primarily due to nitrogen and seed," says Gary Schnitkey, University of Illinois agricultural economist.

Schnitkey recently evaluated the factors that affect crop production profitability and risk over the last nearly 30 years. "Given that corn profitability increased relative to soybean profitability from 2001 to 2010, the relative yield impact more than offset the cost impact. Corn yield increases relative to soybean yields were the predominant factor in profit changes."

Schnitkey analyzed three time periods. He found corn was less profitable than soybeans from 1976-1988, about equal in profits from 1989-2000, and more profitable during 2001-2010.

"Since 2001, corn has generally been more profitable. Corn minus soybean returns averaged $28/acre with higher returns of an average $60/acre recorded from 2006 to 2010. We have seen a rise in corn acres relative to soybeans," he says. "But, corn was not the most profitable every year. Soybeans were more profitable by a large margin in 2002, 2005 and 2010."

The corn-to-soybean yield ratio climbed over the last three eras as well, meaning overall corn yields have increased relative to soybean yields. The yield advantage increased corn profitability relative to soybeans.

Schnitkey says the cost ratio also shifted. Corn costs relative to soybean costs were highest in 2001-2010, reducing corn profitability. But in the case of continuous corn, for example, Illinois yields would have to fall below 162 bu./acre for corn to be less profitable than soybeans.  

In the future, soybean yields would need to rise to enhance profitability. "On-farm management decisions, such as those related to planting timing and technologies, may have positive impacts on soybean yields. With no change in soybean profitability, however, the relative increase in corn profitability will continue to push farmers toward more corn," he says.

Maintaining higher profits with more corn acres will require cost control. Schnitkey says farms with more corn have higher costs, which could eliminate gains from adding more corn to the rotation. Machinery costs also increase. Heavier tillage requirements are costly. In addition, Schnitkey says farmers should invest in crop insurance to mitigate some of the risk of corn production. Yield drags may be seen between corn-after-soybeans and corn-after-corn, he adds.

"The incentive is still to grow more corn,” Schnitkey says. Costs may favor soybean production right now, but I do not anticipate any long-run implications from crop prices unless yields change," he says. "We will see a continued increase in corn profitability versus soybeans."

 

 

Tinker with Corn On Corn

 

Emerson Nafziger, University of Illinois Extension agronomist, encourages growers not to lose heart because disappointing yields come down to a lack of water during the critical grain-filling period.

While continuous corn growers may still see 5-10% lower average yields, he offers tips for factors that can be controlled:

*Consider other rotations.Nafziger says a corn-corn-soybean rotation may offer a good alternative with yields of first-year corn the same as yields in a corn-soybean rotation. Yields of second-year corn were better than yields of continuous corn.

"One added benefit to the corn-corn-soybean rotation over corn-soybean rotation is that soybeans yield about 5% more following two years of corn versus following one year of corn," he says.

*Evaluate nitrogen management. While corn following corn typically needs more nitrogen (N), Nafziger says how much management should change is unclear. Getting N closer to the seed might help, but sound N management, including the right timing, right form and right rate, remain the most important factors.

*Don't fix what isn't broken. Nafziger's research shows that in either rotation, corn responds similarly to planting date and plant populations. While he has not identified hybrids that do consistently better in corn-following-corn, he says stresses must be considered.

"Residue-related diseases can be more of a challenge, especially when there is enough water, and water stress is less of a factor," he says. "Ask seed reps for stress-tolerant hybrid advice."

*Determine tillage needs. Illinois researchers compared no-till to tillage with and without residue removal. No-till with some residue removal yielded as much as conventional tillage. Nafziger's advice is to accurately assess soil conditions before and during spring fieldwork to see if operations compromise the ability of roots to penetrate, should it become dry later.