- The increase in soybean prices is more than enough to offset the drop in soybean yields, so per-acre market receipts are at record levels in 2012/13.
- In 2013/14, projected prices fall more than yields increase, causing per-acre revenues to decline.
- Soybean returns must remain strong for soybeans to be competitive with corn.
- As with other crops, soybean prices and returns are likely to be very volatile.
When the FAPRI economists looked at soybean numbers, they found planted acres would reach over 78 million this year, but stay in the 77 million acre range for the balance of the 10 year period. The average yield will slowly rise from the 43.5 bu. expected in 2013 to 47.9 bushels in 2022, resulting in annual production in the 3.3 to 3.6 billion bushel range. The crush will range from 1.6 to 1.8 billion bushels, exports will range from 1.4 to 1.6 billion, and FAPRI projects the carryout will remain below 200 million bushels annually.
The average farm price each year will be in the mid-$11 range for the 10 years studied. Gross soybean receipts will begin under $500 per acre, and end in the mid-$500 range in 2022-23. Subtracting variable expenses of $140 to $160 per acre, leaves net returns to labor and land of $340 to $380 per acre. As in the case of corn, can a soybean producer in the Corn Belt grow and sell soybeans with that level of return and still have money left for either cash rent or land mortgage payments and still have enough for family living expenses?
- Projected corn and soybean production over the next ten years is expected to slowly increase with higher yields, but with marginally higher demand, farmgate prices will remain at levels which could be challenging for many farmers.
- Corn prices are forecast to average under $5 through 2022 and soybean prices are forecast to average under $12 for the same period.
- Net returns to labor and land over the ten year period may be less than what cash rents will average. That will leave insufficient amounts for family living expenses.
Source: FarmGate blog