Issue No. 7, Article 10/May 8, 2009
Planting Delays: Considering the Switch from Corn to Soybean
I have written in the Bulletin about effects of planting delays in both corn (issue 3, April 10, 2009) and soybean (issue 6, May 1, 2009). In the soybean article I suggested that people look at the relative declines in yield of the two crops to assess when a change from corn to soybean might be considered. Here I will address this question in more detail.
Producers take a range of approaches to the question of switching from corn to soybean, from those unlikely to ever switch to those who have lined up seed for both crops and have held off on applying N and herbicide, leaving open the option to switch from corn to soybean depending on how the planting season progresses. There might be some carryover effect on this decision from last year's unusual weather that resulted in little loss from late planting of both crops, especially corn. While we can't rule out that this could happen in 2009, it's not very likely. Recently, soybean prices have shown more strength than corn prices, though of course this could change.
For these calculations we will use the yield loss functions that I presented in the earlier articles. The "quadratic" curves that define planting date responses for both crops decrease at an accelerating rate. To keep it simple, we will use the curves from the corn planting date response in the northern part of the state (this was very similar to the response in the southern part of Illinois) but will use separate soybean planting date response curves for northern and southern Illinois. We converted bushel yield losses to gross dollar losses, using prices of $4 per bushel for corn and $11 per bushel for soybean.
By May 10, gross income from corn is being lost at the rate of $4.93 per acre for each day of delay, while soybean is losing only $1.80 (northern Illinois) and 16 cents (southern Illinois) per acre per day of delay. By May 30, corn is losing about $9.15 per day of planting delay while soybeans lose $4.78 and $3.92 in northern and southern Illinois, respectively. As expected, the loss in gross income as soybean planting is delayed stays well behind that of corn throughout May, and this difference widens in June.
If we start out by expecting a similar net income from corn and soybeans planted on time, it would make sense to plant soybean instead of corn even if planting is delayed only to early May. Cumulative losses from planting delays in corn total about $94 and $208 by May 15 and May 30, respectively. These losses total about $25 and $80 by these two dates for soybean in northern Illinois, and only about $4 and $43 by these same dates in southern Illinois. So corn planted in mid-May has lost $70 to $90 more gross per acre than soybeans planted at the same time, and corn planted at the end of May has lost about $130 to $165 more gross than soybean planted at the same time, with the difference in gross larger in southern than in northern Illinois.
While planting delays mean faster loss of yield and gross income from corn compared to soybean, the date at which planting soybean will be more profitable than planting corn depends on expected net incomes for the two crops. Based on our data, the gross income for corn planted on time is about $370 per acre higher than the gross from planting soybean on time in northern Illinois, and this difference shrinks to about $240 per acre by the end of May in northern Illinois. Corn yields were very high (maximum of about 230 bushels per acre) in this study in northern Illinois, so if lower corn yields are expected, this difference would be smaller.
Both actual and expected corn yields are lower in southern Illinois, and corn planted on time would be expected to produce a gross income only about $80 higher than for soybean planted on time in southern Illinois. By the middle of May, both crops would be expected to gross about the same amount per acre, so we would expect soybean to produce a higher net per acre than corn if soybean costs less to produce. With both crops planted at the end of May, the gross from soybean would exceed that from corn by about $70 per acre.
As a caution, while these estimates are based on the best data we have, it is likely that actual planting date responses and yield levels in 2009 will be different than the average over several years that make up our data. As the weight-loss ads say, "Individual results will vary." But these numbers do provide some perspective on what we can expect, even while we hope for 2009 to beat the odds after the slow start that we're experiencing now.--Emerson Nafziger