Farmers weigh market trends in considering planting decisions this spring.
Although decisions on what to plant essentially took place last summer or fall when farmers ordered seed and other inputs, now is the time many consider tweaking those plans, says an Ohio State University Extension agricultural economist.
Barry Ward, production business management leader for OSU Extension, said both corn and soybean prices have been up and down since harvest.
"Farmers usually look at those signals as they fine-tune plans for planting," Ward said. "They have the ability to make changes as long as they haven't done any kind of field activity, like applying anhydrous ammonia or pre-emergent herbicides, that would prohibit them from switching. And, every year we have different weather considerations — last year, some farmers switched from corn to soybeans because of all that rainfall and the lateness of planting."
This year, corn prices remain strong despite the fluctuations since fall, but recently soybean prices have strengthened in comparison, Ward said.
"The marketplace is sending signals that we might try to find more bean acres," he said. "Soybeans still aren't showing a better profit per acre, but the improved soybean prices are a consideration to keep in mind."
Of course, input costs and agronomic considerations also come into play. Rotating crops decreases insect and disease pressure, and the nitrogen-fixing ability of soybeans allows farmers to reduce costs and applications of fertilizer on corn the following year. But in the last few years, more farmers have weighed the benefits of crop rotation against the outlook of strong corn prices and have made the decision to plant corn after corn, Ward said.
Yet basing decisions on market trends can be precarious.
"Trying to outguess the market is sometimes iffy," he said. "It's a guessing game, and some farmers look at the possibilities and decide just to stay with their normal rotations. This is a decision every farmer needs to make based on their own enterprise budgets and their own situation."