Soybeans, a Pivotal Crop in 2017
KIMBERLY – At the start of the 2017 growing and planting season, several factors are coalescing to suggest that soybeans could prove to be a pivotal crop for many growers this year.
Those reasons were outlined at the Extension Service's semi-annual farm management update for agribusiness professionals by Winnebago County agricultural agent Darrell McCauley. He noted soybeans gained attention for this year in the crop intentions report for March 1 with the predictions of a record high 89.5 million acres this year – increases of 7 percent for the nation and 10 percent in Wisconsin.
In more recent weeks, several more factors have arisen to suggest even more soybean acres, McCauley observed. They include the slow pace of spring tillage, especially in the Wisconsin's east central and northeast counties, and the delays in corn planting that add risks for growers who intend to raise and sell the crop for grain, he observed.
Citing the most recent weekly crop progress and condition report, McCauley referred to 13 and 10 percent completion rates of spring tillage respectively in those counties and 21 percent in Wisconsin as of May 1. In the northeast region, this falls well short of the 5 year average of 36 percent, he noted.
In the east central and northeast regions, corn planting was at only 1 percent compared to 14 percent for the 5 year average. Statewide, corn planting had reached only 5 percent by May 1.
But there are other reasons that point to the possible increase in soybean acres, McCauley pointed out. They include the suitability of soybeans as an income crop to replace alfalfa and winter wheat lost to winterkill, the large inventories of forages enjoyed by some livestock farmers, and the favorable economics of soybeans compared to corn, he indicated.
For those with large forage inventories, it's a relatively easy conversion for a no-till conversion from alfalfa or winter wheat that's terminated, McCauley remarked. Even without the most recent developments, the planting intention report predicted a record 2.15 million acres of soybeans for Wisconsin – a number that Extension Service soybean specialist Shawn Conley suggested could increase by another 75,000 acres.
Based on the national report, 27 of 31 states in the data set are expecting an increase in soybean acres in 2017. As of May 1, soybean planting had reached 10 percent of the planting intentions compared to 8 percent by that date in 2016 and 7 percent in the 5 year average.
Whatever the soybean acres prove to be, McCauley is concerned that too many growers are not pursuing a marketing strategy that would allow them to lock in a profit. Typically, that would involve selling a portion of one's production early, making use of futures markets, and limiting input costs, he explained.
McCauley also believes more education is needed to have growers understand the local basis factor in grain pricing – the difference between futures prices and local prices which reflect the buyer's costs for transportation, storage, and administration. At a minimum, be aware of the five and three-year trends which show the timing of those local basis discounts that are based on demand, supply, storage capacity, and the need to fulfill contracts, he advised.