Schnitkey says, “From year-to-year, corn yields have been more variable than soybean yield. In years of the high corn yields, the corn-to-soybean yield ratio tended to be higher.” He says in recent years when acres have shifted up or down, some of the movement can be attributed to expectations on relative corn and soybean yields. But he says that leads to the question: Is the decade of the 2000s a better representation of future relative yields or are more recent years a better representation? … remembering that 2000 to 2009 was a period of high ratios and the last three years was a period of lower ratios.
Schnitkey’s answer to his rhetorical question is that the trend lines are relatively stable and will continue into the future. He says, “This implies that the relative low corn yields in 2010 through 2012 were caused by random events similar to those during the late 1980s and early 1990s. A period of above average yields will follow sometime in the future.”
So what should you do for 2014? Based on his calculations of the trend, Schnitkey says, “A 2014 corn-to-soybean yield ratio can be extrapolated into 2014. This extrapolation gives a 3.43 corn-to-soybean yield ratio. This 3.43 extrapolated ratio is below the 3.59 average for the decade of the 2000s, but it is above the 3.08 average from 2010 to 2013.” Keep in mind that his numbers are for the state of Illinois, but for other Corn Belt states the trend may be quite similar. And that may provide some guidance for yield prospects in the coming year. Match those with price prospects and begin your process of managing revenue risk for 2014.
Ratios between corn and soybeans have slowly changed over time, reflecting higher corn yields relative to soybean yields. However the long term trend has taken on more volatility in recent years, with a strong tendency toward corn from 2000 to 2009 and less in the past three growing seasons. But the overall trend may well remain into the future based on several decades of past history.
Your 2014 checklist for success:
- Get a soil test and recommendations from the Texas Soil and Plant Lab.
- Fill your planter with LG Seeds.
- Call Koehl Bros. and order a new bin, because you will need it!
Source: FarmGate blog