Grant county farmers have asked the same question for the past few years: which is more profitable to plant – soybeans or corn?
“What really carried us financially wasn’t the corn,” Chris Hurt, Purdue agricultural economics professor, said to a group of farmers at an educational seminar at Central Indiana Ethanol last week. “With good yields and low prices last year, it was ... the soybeans.”
A Purdue report from October predicted the revenue from soybeans harvested from average productivity to be $261 per acre – $50 more than corn, which is $211 per acre.
But the decision of what to plant next year is more nuanced than simply planting what is most profitable because the crops may require different machinery and production costs and predicting the market’s changing yearly demands can feel like a gamble.
Hurt thought the U.S. would see more acres of soybeans than corn this year, which would have been a first since 1983, according to David Pitt of the Associated Press, but at the last moment “corn made a leap ... and got a little bit ahead on acreage so corn is still king for this year,” Hurt said.
The amount of soybeans planted increased to 89.5 million acres nationwide, up by seven percent from last year. Corn decreased by four percent but it still won the acreage race at 90 million acres.
Hurt expects soybeans to finally edge out corn in acreage next year, in large part due to the high demand in China, where, Pitt said, “soybean meal feeds pigs, cows and fish in a culture increasingly seeking to eat more meat.”
But the weather in South America – more so than the Chinese craving for meat – will affect Grant County farmers’ profitability.
“Obviously what happens in South America, as very big producers of both corn and (as) the world’s bean producers will have an impact,” Hurt said.
“If they have trouble with their bean crop and low production in South America, that’s going to really stimulate bean prices and we will have a lot more beans. If they have a super crop of beans in South America ... then it’s going to tend to lower world prices and we will probably see corn stay king,” Hurt added.
One metric economists use to gauge demand is ending stocks, which are essentially the leftover crops from the previous year’s inventory.
In 2016, corn had 16.3 percent leftover, while soybeans had only 10 percent. Wheat, which is largely not planted in Indiana but is a player in neighboring states, had well over 50 percent leftover last year in what Hurt described as an “overwhelming disaster.”
The statistics led Indiana farmers to convert some of their cornfields to soybean fields and farmers in other Eastern Corn Belt states to give up on wheat in favor of the financially more attractive soybeans.