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Iowa Ag Review

Abstract

T he recent discovery of soybean rust in the United States has prompted many agricultural pundits to predict more corn acres will be planted in the coming crop year. While soybean rust may cause some shift from soybeans to corn, producers have already begun such a shift and will likely continue regardless of the presence of soybean rust. Figure 1 shows that Iowa soybean acreage reached its peak in 2001. Since then, corn acreage has risen by nearly 9 percent while soybean acreage has declined by over 7 percent. Three major factors explain this shift: trend yields, variable costs, and prices. If we look at these factors over the past several years, corn has outpaced or matched soybeans in all three areas. Corn trend yields are growing relatively faster than are soybean trend yields. Variable costs of production for corn are maintaining a consistent margin with those for soybeans. Futures prices for corn are relatively stronger than are those for soybeans.

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