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Financial feasibility and strong market prices make beans that best choice for farmers

Beans, corn the crops of choice for 2009

With a significant amount of seed already in the ground, Mississippi’s growing season is moving full speed ahead.

If figures from the U.S. Department of Agriculture (USDA) are any indication, soybeans will be the state’s most-produced crop.

The USDA’s Prospective Plantings Report released March 31 show Mississippi farmers intend to plant 2.1 million acres of soybeans in 2009.

That is more than triple the amount of corn planted (630,000 acres) and seven times the acreage of cotton (300,000 acres). Wheat production, with 230,000 acres, will drop 56 percent compared with 2008.

While the USDA numbers are not exact, they usually provide a pretty accurate picture of what will fill farmers’ fields, said Dr. John Anderson, extension professor of agricultural economics at Mississippi State University. This year is no exception.

“Soybeans will definitely be our major crop in terms of acreage,” he said.

Soybeans are an attractive crop because their input costs are slightly lower than corn’s and dramatically cheaper than cotton’s.

Compounding the financial feasibility of soybeans are their strong market prices.

“It takes less transportation to haul an acre of beans than it does to haul an acre of corn,” said Dr. Ernie Flint, extension agent for the Yazoo County and Attala County Extension Service.

Commodity prices are not expected to hit the record highs they did last summer, when the cost of fuel drove up transport costs. The price of a barrel of oil went well north of $100 last summer, the manifestation of which was most recognizable when motorists filled their vehicles with gasoline.

It also drove up the cost of fertilizer farmers use to grow their crops. While analysts predict fuel and fertilizer costs will stay much lower this year than last, prices still have not returned to the levels of two and three years ago, which can make high-input crops like corn and cotton cost-prohibitive and leave soybeans as the only financially viable option.

What makes soybeans substantially cheaper to grow is the lack of nitrogen fertilization required to grow them. Where corn requires nitrogen-based fertilizer, soybeans can get nitrogen naturally through the atmosphere.

“Even though the cost of nitrogen is down this year, it’s still significant,” Flint said.

Said Anderson: “In terms of production risk, it’s a decent crop, as well, so it’s got quite a bit that makes it attractive this year.”

November soybeans nationwide, according to futures contracts, will fetch somewhere in the range of $9 a bushel.

“Our prices locally will be quite a bit lower than that, but you’re still looking at over $8 (bushel) for soybeans, which is still a pretty good price,” Anderson said.

The supply side favors soybean production, too. The past couple of growing seasons have trended heavily toward wheat and corn, which has left the soybean stock down “quite a bit, particularly over the last year,” Anderson said.

“It’s a lot tighter than it’s been the past couple of years, so prices have responded to that. The expectations for returns are more attractive than anything else right now.”

As for the nine-county area he serves, Flint said it’s still too early to make a determination as to whether soybeans will overtake corn as the most prevalent crop of the 2009 growing season.

“Corn is still very close. They’re almost neck and neck. For the last three or four years, corn has been on top, but we’ve seen a shift toward soybeans this year. As to whether it’s the Cinderella seed already, I don’t know, but it’s going to be a lot stronger this year.”

Each crop carries its own list of pros and cons.

“Soybeans are more vulnerable to weather, insects, diseases,” Flint said. “We just don’t see the level of damage with weather in corn as we do in soybeans. All these things will enter into the mind of a producer.”

Contact MBJ staff writer Clay Chandler at clay.chandler@msbusiness.com .

About Clay Chandler

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