Univ of Illinois Studies Corn vs Soybean in 2008

A report on "Projected Corn and Soybean Returns" in 2008 by Gary Schnitkey of the University of Illinois predicts that higher costs of corn production may cause some farmers to switch acres from corn to soybeans. The study, aimed at projecting the returns for 2008 was conducted with farmers enrolled at the Illinois Farm Business Farm Management. During the period studied, corn returns minus soybean return (corn-minus-soybean-returns) were lowest in 2005 when corn yields were below average while soybean yields were near average. Corn-minus-soybean-returns were highest in 2006 and prices increased substantially over historically average levels. In percentage terms, corn price increased more than soybean price in 2006. This can be indicative that corn may be profitable for 2008. However, Schnitkey recommends to consider four points in decision-making that includes: commodity cost, individual famer decisions, cost of additional equipment, and probable impact in 2009.

In further anlaysis, Schnikey concluded that, "Due to yield drag and higher costs, corn-after-corn is projected to be less profitable than corn-after-soybeans. Planting more corn in 2008 could result in more corn-after-corn in 2009, thereby lowering yields."

The report can be accessed at: http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_18/fefo07_18.html and press release can be viewed at: http://www.aces.uiuc.edu/news/stories/news4245.html