For years, corn has led in profitability, making corn-on-corn a top contender for many U.S. farmers. With soybeans rallying at the close of 2020, many farmers were left wondering: Would I make more profit in 2021 with soybeans on my undecided acres?
But crop prices aren’t the only factor that determine profitability. Farmers must also consider potential yield penalties and increased expenses related to continuous cropping.
To help farmers in the corn vs. soybean debate, Granular‘s Data Science team created a proprietary Corn vs. Soybeans Calculator. This one-of-a-kind crop rotation analysis tool accounts for best-in-class data on all these factors. Designed for farmers throughout the Midwest, this free tool requires just a few inputs to generate an instant recommendation.
Calculating Yield Potential and Expenses
Here’s how the Granular tool works:
1. Select your state and crop previously grown on the selected acres.
2. The calculator will automatically default to anticipated expenses and yield (these numbers are based on university budgets and Granular data from more than 10 million aggregated and anonymized acres and corn-soybean rotations, broken down by state). Expected yield penalties and increased costs for mitigation strategies are also factored in. Crop price is market closing cost, updated daily via Barchart.
3. Take these estimates as a starting point and adjust the numbers based on your own yield history and expense record.
4. Walk away with a data-driven estimate of your potential profitability for the crop of your choice.
Another benefit from using an ROI calculator? The data gives a better representation of yield penalties from continuous cropping. Much of the existing research on these reductions is localized or comes from small-scale field trials, which doesn’t tell the whole profit story as well as the larger, more comprehensive data sets used here.
“The continuous cropping penalties are going to be different for every farm and soil type and could be a $40- to $150-per-acre decision for these operations,” says Ky Kiefer, Granular Senior Data Scientist. “By leveraging Granular’s vast anonymized data set, we can help more farmers across more states understand their yield penalties with this tool.”
Don’t Forget Crop Price
The calculator also lets you adjust crop price — a critical input given that fluctuating crop prices can flip profitability. Soybean prices have seen lots of volatility since November, with limit up jumps to a strong surge in the new year. It is always recommended to check with your local and regional grain location and brokers for your best option.
Don’t forget that marketing is a dynamic game and unless you’re forward contracting or locking in a price point, the calculator will change. There are still plenty of factors that can affect 2021 prices, from weather and planting in South America to international trade and ethanol demand.
The calculator will stay relevant as you progress through your marketing and growing season, updating where relative corn and soy profitability are at on your fields. We recommend balancing this tool with your on-farm storage capacity and futures spreads, and regularly touching base with your grain buyer to see if favorable forward contracting opportunities exist.
Every Aspects Counts
There is a lot that goes into choosing the right crop for your undecided factors, and we hope that tools like the Corn vs. Soybean Calculator can help guide your decision-making. Soybeans are on a market rally but rotating to corn might still be optimal for your farm. Draw on your own data, records, and experiences to make the tool as accurate as possible for your situation, so you can feel confident about choosing the crop that will be the most profitable for you in 2021.
Granular offers a full suite of advanced digital tools as the world’s leading FMS (farm management software) provider, such as Granular® Insights, Granular® Business and Granular® Agronomy.
Andy Fordice is the Illinois and Indiana Area Digital Sales Leader for Corteva Agriscience and Granular. He is a Purdue University graduate and currently resides in Zionsville, Indiana. In his spare time, Andy enjoys helping on the family farm he grew up on and spending time at the lake with his wife and three children.