What will be your 2013 cropping plan? Continuous corn, unless you have had all the fun you can stand? Two-thirds corn and one-third beans? A 50-50 corn and soybean rotation? Or will you be willing to pencil out the potential profits from some double-crop wheat and soybean acres? No money there, why would you want to do that?
Take a look at the 2013 delivery prices for corn, soybeans and wheat. They are not quite as exciting as the 2012 crop has been in the past two months, but next year will be a return to normal year, won’t it? And you will be able to get back to just raising corn and soybeans? University of Illinois farm management specialist Gary Schnitkey suggests that the recent higher prices of wheat may make some producer think twice about double-cropping wheat and beans, since the combination provides revenue closer to corn than has been the case for many years.
His analysis provides a return to the land and the operator of $356 per acre for double-crop soybeans in 2013, compared to $467 for corn and $314 for soybeans, and only $152 for wheat. He says, “In 2013 budgets, wheat-double-crop-soybean return is closer to corn return and further from soybean return than is typical from a historical perspective, but differences from historical averages are not large. Projected returns do not suggest large increases in wheat acres. However, favorable fall planting weather could lead to more wheat plantings.”
Schnitkey’s revenue is based on a 160 bushel corn yield and a $6 price, a 48 bushel soybean yield and a $13 price, a 56 bushel wheat yield and an $8.35 price, and a 32 bushel soybean yield behind the wheat. Wheat-double-crop-soybeans together have a combined return of $356 per acre, which equals $156 for the wheat and $204 for the soybeans. That turns out to be $15 per acre more than the typical revenue from double crop soybeans, which Schnitkey says may not result in that much more acreage.
There are two other factors that may enter into consideration of more double-cropped acres. One is the potential for good fall planting weather. If current schedules are maintained for a record pace of corn harvest and soybeans mature in a timely manner, then fall wheat planting would be facilitated. Any repeat of the 2012 spring in 2013 will mean an early wheat harvest and early planting of double crop soybeans. But will there be a repeat of the 2012 weather?
While no one wants to see a repeat of the 2012 drought ever again, the way the weather patterns are developing over the Pacific Ocean may point to an increased need to manage risk. La Nina departed early in the summer, but left nothing in its place, subsequently we had a drought because of the lack of any weather systems. Authorities have indicated that an El Nino began in the Pacific in late summer. However in recent days, there have been increased indications the El Nino may be short lived and would be followed possibly by another La Nina. If that is the case, managing weather risk in 2013 would be paramount, whether by crop insurance or by cropping patterns.
Recent increases in the wheat market have created higher profit opportunities for double-cropped acres than would normally be the case. While the double-crop revenue does not surpass corn, it does surpass wheat and soybeans individually. If fall weather is conducive to wheat planting, there could be increased acres. And with early indications of 2013 weather, double-cropping may provide a good risk management plan.
Source: FarmGate blog