Halfway through the crop insurance price discovery month (as of Feb. 17), both corn and soybeans were averaging slightly above last year’s crop insurance guarantees.
Corn stood at $3.97, compared with last year’s spring price guarantee of $3.85.
Soybeans, on the other hand, were averaging almost $10.22, well above last year’s $8.85 guarantee thanks to surprisingly strong exports thus far in the 2016 marketing year, which are drawing expected ending stocks down. With Brazilian harvest of a likely record crop running into its final laps, there’s still time for that guarantee to weaken some.
The Purdue University 2017 crop budgets for average productivity (170 bu. corn and 52 bu. beans), using $3.60 for corn and $9.50 for beans still show beans beating corn by $64/acre. So even at slightly lower than recent prices, soybeans seem to have an advantage.
However, Purdue University economists David Widmar and Brent Gloy point out: “It’s important producers carefully consider their farm’s unique production expenses headed into 2017. While additional acres of soybean across the U.S. in 2017 are expected, farmers – especially if facing herbicide resistance issues – might find themselves with a different budget signal than the national trends. How widespread these differences are will likely play a key role in determining how planted acres adjust in 2017. Most of the current signals still look to favor soybeans and it is likely soybeans will gain some ground on corn acreage in 2017, but each farmer will have to look at their own budgets to make the call.” Click to see more of their analysis.
Correction: An earlier version of this article incorrectly stated the average price for corn.