In his market outlook presentation this week at the Indiana-Illinois Farm Equipment Show, Dr. Chris Hurt detailed the need to squeeze corn production costs to $4.50 a bushel or less. But the profitability picture for soybeans next year is much brighter, so there is a strong market signal to shift acres away from corn. In Indiana that means more soybeans and wheat. Hurt tells HAT those margins are definitely attractive.
“We’re looking at average quality land in Indiana maybe as much as $50-60 an acre better returns on some of our Purdue budgets for soybeans vs. corn. Now that’s a pretty big incentive when you’re already tight on margins to plant more soybeans. In the southern part of Indiana we’re really looking at wheat/double crop beans as a very strong return, maybe $100-150 an acre more than what we see on corn for next year. I mean these are huge returns.”
Hurt added winter wheat has already been planted so that’s not something a growing can elect if he hasn’t already planted, “but I think it does point out that wheat has had more incentive, not as a single crop so much, but south of Interstate 70 where they can effectively double crop,” he said.
After hearing his good news/bad news outlook this season, Hurt can tell a lot by the looks on farmers’ faces.
“I think they kind of have their arms crossed and a pretty stern look on their face at this point. We’ve come through some very good return years and if we have to have moderation it’s better to come from some years when we had very good returns. But I think what they’re really concerned about is the longer run. Will we be able to get these prices back up some more?”
The Purdue Extension agricultural economist says most people like his $4.50 corn outlook compared with some of the $4.00 and even $3.50 or lower outlooks coming from other analysts.