Return on Corn to Exceed Return on Soy

Many row crop farmers in the U.S. are considering sowing more corn and reducing soybean acres as they watch and listen for clues from the U.S.-China talks.

“Farmers are going to really take a hard look at corn this year as an alternative to soybeans,” said Gary Schnitkey, an agriculture professor at the University of Illinois. “There is some optimism for corn. There is less so for soybeans.”

The trade war and a large forthcoming South American crop have pushed U.S. soybean prices 15 percent below their 2018 high. Corn has fared much better.

Returns on an acre of corn this year should eclipse those from an acre of soy on high-productivity farmland in central Illinois, the first time that’s happened since 2015, according to budgets Schnitkey created that assume crop rotation.

Another draw is that the U.S. is less reliant on export markets for its corn crop than soybeans, Schnitkey said. In recent years, the U.S. has exported about half of its soybean crop, much of it to China, compared with 15 percent of corn, according to the USDA.

Given these reasons, corn acres are widely expected to rise and soy acres to shrink this year. U.S. soybean planting may slip 5.5 percent to 84.6 million acres as corn increases 1.3 percent to 90.3 million acres, according to a Farm Futures report this month.

Source: Bloomberg