At the back-end of soybean production in 2011, prices are expected to remain fairly good. At the front-end production costs are expected to rise, and saving on input costs will be a critical issue in making money with soybeans in 2011.
Soybean acreage is expected to be down slightly across the Southeast in 2011, but prices remain good. To take full advantage of the good soybean prices, growers are going to need to save as much money as possible on the front-end of production to produce enough profit to compete with other crops.
For growers in the upper Southeast wheat as a double-crop is often the difference in making money growing soybeans. Wheat prices jumped in January from around $8 per bushel to $8.92.
A wheat/soybean double-crop, if marketed precisely, could bring growers $21-22 per bushel, but early maturing wheat and late-planted soybeans isn’t a good recipe for optimum yields.
With cotton prices still above 90 cents a pound and peanut contracts in excess of $600 per ton, soybeans are likely to lose acreage to cotton, but won’t be able to make it up by taking over peanut acreage.
The high projected prices for row crops grown in the Southeast are offering growers some cropping options, but in general are ramping up prices quicker than most forecasters predicted back in the fall.
Initial forecasts called for production increases of 2-3 percent for soybeans, 5 percent for corn and eight percent for wheat. With all commodities competing for acreage, those cost increase estimates now (January 2011) are nearly double forecasts only 2-3 months ago.
Fertilizer costs have declined since the rapid spike in 2008, but that trend is almost certain to end in 2011. USDA cost estimates for 2011 are $535-$675 for anhydrous, $420-$550 for potash and similar increases for other fertilizers.
Two factors: the cost of energy and demand could dramatically increase fertilizer costs as growers get closer to planting date. There is little hope that fertilizer prices will remain stable for 2011, most economists agree.
Pesticide cost will likely follow the upward trend in price, but should not be as volatile as fertilizer. With an expected increase in glufosinate-tolerant crops in 2011 in the Southeast, plus continued dependence on glyphosate as a primary weed management tool, there is some concern that herbicide prices could increase moderately in 2011.
Wild card in production costs
The wild card for soybean production costs and for making money growing beans is the seed. In 2011, genetic trait-loaded soybean seed are expected to make up nearly half the total cost of production. More technology means more cost to farmers, so in some varieties with specific stacked traits the cost of seed could exceed 50 percent of the total production costs.
For example, the base price of one company’s Roundup Ready 2 Yield seed is $44.88 a bag for the lowest cost seed. The highest cost RR2 seed is $51.92 per bag. How high the final cost of soybean seed goes depends on what’s added to the seed, both genetically and conventionally.
Roundup Ready seed, by comparison, ranges from $37.22 to $42.19 a bag. Conventional seed with no genetic traits included sell for $30.80 per bag. Conventional insecticide and fungicide seed treatment will likely inch upward
Taking care of these high cost seed is critical to making money growing soybeans in the Southeast. Last year average yields in South Carolina were only 25 bushels per acres. In North Carolina and Virginia yields were about 10 bushels per acre higher.
Clemson University Agronomist Pawel Wiatrak says choosing the optimum soybean planting date will allow growers to reduce seed per acre without sacrificing yield.
His three-year research on evaluation of seeding rates in soybeans (across maturity Groups IV-VII) showed that seeding rates of soybeans can be reduced from high rates of 137,500 seed per acre to 82,500 seed per acre without a significant yield loss if soybeans are planted under optimum planting conditions by June 5.
The caveat, Wiatrak says, is planting date. Highest yields across all maturity groups planted in South Carolina, he notes, were observed for soybeans planted from early May to May 20. In his research, soybeans planted after May 20 began losing yield at a rapid pace.
“Based on estimated yield loss, for each day of delayed planting the yield decreased by about 0.4 bushels per acre for soybean planting between May 20 and June 5, 0.3 bushels per acre for planting between June 5 and June 16, and 0.6 bushels per acre for planting between June 16 and July 2,” says the Clemson researcher.
The yield loss each year will depend on variety, location, availability of moisture and nutrients, and other planting and weather factors.
Save $20 per acre
By planting at the optimum time and reducing seeding rate by 40 percent (137,500 to 82,500 seed per acre), growers would increase the soybean yield potential and save nearly $20 per acre in seed cost, and across South Carolina’s expected 550,000 to 570,000 acres in 2011, savings would be in the $10 million range.
Veteran North Carolina Soybean Specialist Jim Dunphy agrees with the reduction in seeding rate, with one significant concern — determinate versus indeterminate varieties.
Dunphy says, “Maturity Group III and Group IV beans have gained some popularity in recent years in the upper Southeast. The percentage of these soybean varieties grown is small, but a few growers have had good success with them.
“These indeterminate varieties are a little different animal than our more popular determinate varieties. We know what we will get with different seeding rates with most of the determinate varieties we plant in North Carolina — that’s not always the case with these Group III and IV beans,” he says.
Increasing seeding rate on these indeterminate varieties from 100,000 per acre to 150,000 per acre may produce a thicker, better looking plant, but yields will be about the same, he adds.
“Even to get high yields, in the 70 bushel per acre range, 50,000 seed per acre for determinate varieties and 100,000 seed per acre for indeterminate varieties planted in May is adequate. If you’re not getting a bushel and a half per pound of seed you plant, or 60 bushels from 40 pounds of seed, plant population is not what’s holding yields back,” Dunphy says.