Urbana, Illinois
March 27, 2008
Corn may be a more profitable crop
for Illinois producers in 2008 than soybeans, according to a new
University of Illinois
Extension study.
"Relative profitability of corn and soybeans may impact acreage
decisions," explained Gary Schnitkey, U of I Extension farm
financial management specialist who prepared the study with
Extension colleague Darrel Good. "Given the current cash bids
for fall delivery, our analysis suggests that corn will be more
profitable than soybeans in 2008 on many farms in Illinois.
"Our analysis was conducted by calculating expected corn and
soybean revenues for each Crop Reporting District in the state.
Differences in corn and soybean revenue are compared to
differences in non-land production costs. Across all districts,
corn is projected to be more profitable than soybeans based on
harvest bids as of March 20."
The full report, "Corn
versus Soybean Returns in 2008", is available on U of I
Extension's farmdoc website.
However, most projections indicate fewer corn acres and more
soybean acres will be planted in 2008 as compared to 2007,
Schnitkey noted.
"While Illinois farmers may--as projected--shift acres from corn
to soybeans in 2008, the relative profitability of the crops
does not appear to be a reason for this acreage shift,"
Schnitkey said.
Schnitkey said a number of factors could change the projected
relative profitability scenario.
"A relative corn and soybean price change could cause
profitability to switch," he said. "Relative yields could vary.
In particular, any yield drag for corn-after-corn could narrow
profits.
"Insect, disease, or fungus problems could require pesticide
treatments which could raise the costs of one of the crops."
by Bob Sampson |
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