Mid-Atlantic & southeast growers face tough cropping decisions in the coming weeks & months based on economics by Barney Bernstein with Entira, an Ag consulting business, and Dr. Nick Piggott, economist at NCSU (table below). Even though crop prices for corn and beans have come off the season lows, 2015 may see an even larger soybean crop, with soybean prices dropping into the $8 range. How will growers plan for and manage their risk for 2015 and beyond? Growers producing average soybean yields have significant financial risk if prices drop into the 2015 harvest, while corn production will require around 130 bu/acre to break even.
Factors to consider: An average double crop soybean break-even price is around $10.45/bu at 30 bu/ac; production costs include variable and fixed costs and assume an $85/acre rental rate (split between wheat and soybeans). Farmers who can produce full season bean yields at 40 bu/ac have a break-even price at an optimistic $8.90/bu.
Options and resources are available: Farmers may want to consider double crop or full season sorghum; sorghum offers weed resistance management options and rotational benefits that improve bean yields; and 85 bu/ac are relatively easy to achieve (for example, farmers on Eastern Shore, VA, had 2014 sorghum yields at around 95 bu/ac). Planting multiple crops seems to be by far the best solution for spreading the risk of volatile prices and weather unpredictability.Bernstein & Piggott summary budget