This document printed from the University
of Illinois Extension Crop, Stock and Ledger at http://www.extension.uiuc.edu/champaign/
The Corn-Soybean Balance
January 7, 2008
N. Dennis Bowman
Extension Educator, Crop Systems
Champaign Extension Center 801 N. Country Fair Drive
Suite E
Champaign, IL 61821
Phone: 217-333-4901
FAX: 217-333-4943 ndbowman@illinois.edu
It used to be simple; the preferred cropping system in Central Illinois was a corn-soybean rotation. It made agronomic and economic sense. This rotation balanced inputs, pests and labor while spreading market and yield risk. Then along came the ethanol boom which suddenly shifted the economics, heavily favoring continuous corn.
The decrease in soybean acres has led to smaller supplies of soybeans and now the soybean price has risen to a more competitive level with corn. For ten years prior to 2006, corn had been staying in the $2.00 per bushel range, with soybeans in the $5.00-$6.00 range. Now corn often hits the $4.00 mark and soybeans are currently approaching $12.00 per bushel.
Now farmers that were pushing towards more continuous corn are re-evaluating that decision. One tool that can help farmers compare their options is "Corn –Soybean Rotation Tool" which is available for free on the University of Illinois's Farmdoc website, www.farmdoc.uiuc.edu. This is one of the FAST Tools Spreadsheats and requires Microsoft Excel to run.
The Rotation tool allows you to really play the "what if" game. What if yields and prices change? You can quickly adjust the numbers and see the impact on the bottom line. It compares three rotations 50-50 corn-soy, 66-33 corn-corn-soy and continuous corn. You will have to make some assumptions on yields under the different rotations. How much of a yield penalty is there for second year corn. Many farmers assert that there is no penalty but recent university research at both Illinois and Purdue still shows a yield decrease for corn following corn. This yield penalty is normally more than 10 bushels per acre in the research studies. You may also want the the yield for soybeans in the corn-corn-soy rotation up a little based upon lower disease and soybean cyst nematode pressure. You can also tweak the input costs to more accurately reflect your management plan.
There are some pretty big assumptions that must be made but with a few keystrokes you can quickly play the "what-if" game and compare bottom-line under these different scenarios. Check it out yourself, this is a really nice tool with several other cool options I didn't have time to cover.