Faced with slumping prices for both corn and soybeans, American farmers in the Midwest are opting to increase their soybean plantings this spring in an effort to minimize losses on their crops.
Mark Tuttle, a farmer in northern Illinois, is among those who have planted more soybeans and less corn on his farm. With prices for both crops hovering near three-year lows, Tuttle found that soybeans’ lower production costs offered him the best chance of turning a profit in the country’s top soybean producing state.
Tuttle even planted soybeans in one of his fields for a second straight year, breaking the traditional soy-corn-soy rotation for field management. He and many other farmers are hoping to just minimize their losses in the current challenging market environment.
However, planting more soybeans at a time of sputtering demand from importers and domestic processors will only serve to drive prices lower, further swell historically large global supplies, and erode U.S. farm incomes, which are already poised for the steepest annual drop ever in dollar terms.
“There’s a better chance of making money with soybeans than there is for corn right now,” Tuttle said. “But if we have another bigger crop, prices are going to go lower and that’s not going to bode well for the farmer.”
In nearby Princeton, Illinois, farmer Evan Hultine also increased his soybean plantings and scaled back on corn. He found that the high production costs, partly due to a jump in interest rates, were likely to erode most or all of his corn returns, while soybeans remained marginally profitable.
According to University of Illinois agricultural economists, their annual early season crop budget estimate projects negative average farmer returns in the state for both crops, though the losses would be smaller for soybeans.
With few appealing options, Midwest farmers are turning to soybeans in an effort to limit their losses, even as they acknowledge that increased soybean production could further depress prices across the board.