Duane Dailey
Senior Writer
573-882-9181
DaileyD@missouri.edu
April 1, 2005
Missouri soybean growers, showing contrarian mood,
will plant more acreage while U.S. farmers cut back
Missourians intend to plant 5.1 million acres of soybeans this year, up from 5 million acres last year. U.S. farmers will cut acreage by 2 percent, to 73.9 million acres from 75.2 million acres, according to a USDA report on March 31.
"Economic outlook is stronger than fear of rust," said Melvin Brees, market analyst at the MU Food and Agricultural Policy Research Institute (FAPRI). "A clue to intentions can be found in the soybean-corn price ratio."
"New-crop futures are offering more for beans than for corn," Brees said. "When prices favor soybeans, producers move toward planting more beans."
On April 1, November soybean futures were selling for $6.05 per bushel, compared to $2.35 per bushel for December corn. "That’s a ratio of 2.57 to 1," Brees said. "A 2.4 ratio is considered breakeven."
"That 2.4 ratio comes out of Iowa and northern Illinois," he said. "I’d argue that in Missouri the break-even ratio is 2.3, or lower."
Historically, Missouri producers always plant more soybean acreage, compared to corn.
"There’s a reason that Missouri producers make soybeans their number one cash crop," Brees said. "Soybeans have an advantage in costs and returns."
Rising production costs, especially higher prices for diesel and fertilizer, favor soybeans over corn, which requires more inputs per acre. A soybean crop requires fewer trips across the field. Also, the soybean plant, a legume, fixes nitrogen from the air, reducing fertilizer needs.
"Last fall, with the first report of soybean rust in the state, FAPRI ran calculations on the added costs of spraying a fungicide to prevent rust," Brees said. "The added cost of one fungicide application on soybeans was about the same as the increased cost for fuel and fertilizer for corn this year."
Nationally, USDA forecasts corn acreage to be up by 483,000 acres to 81.41 million acres. "That’s up 1 percent from last year," Brees said.
In Missouri the corn acreage is up 5 percent to 3.1 million acres.
"In the end, weather at planting time can change the best of intentions," Brees said. "If it is an open spring and the corn planters can keep running there will be more corn. If a long wet spell delays planting, farmers will switch to soybeans."
FAPRI provides economic forecasts and policy analysis to the U.S. Congress.
Source: Melvin Brees (573) 882-2679
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