Market price for soybeans may make it a good alternative summer crop for some Oklahoma producers

Friday, February 9, 2018

Wheat is underperforming as a cash crop in the minds of many Oklahoma producers, leading some to look at the feasibility of planting alternative summer crops as drought persists in the state.

Kim Anderson, Oklahoma State University Cooperative Extension grain marketing specialist, said many state crop producers are currently considering corn, milo, soybeans and cotton.

“Based on the market's current offering on these crops, the most profit rests with cotton and soybeans,” he said. “That is certainly not the only consideration, but grain markets can play a significant role. Every producer looking at alternative crop decisions should take the time to put pencil to paper and examine all economic factors.”

Given the breakeven price of $8.50 for the variable cost of soybeans at a production rate of 25 bushels per acre, stacked against a harvest delivery price as of this writing at approximately $9.10, a producer stands to profit nearly 60 cents per bushel or $15 per acre.

“That's a better deal than one would get for either corn or milo, both currently at their breakeven price of $3.35 per bushel,” Anderson said. “Cotton may be more profitable than soybeans but the risk may be higher as well. It costs about three times more to produce cotton than soybeans, plus harvesting cotton requires specialized equipment.”

The price of wheat being offered right now falls just a penny under the breakeven for variable cost based on a 35 bushel per acre estimate of $4.31, plus or minus 20 cents depending on a producer’s location.

“Bottom line: Wheat producers may be able to command a price of up to $5 if they are able to deliver a quality product with high test weight and protein,” Anderson said.

In terms of the state economy, cash receipts for Oklahoma soybeans account for nearly $89 million annually, according to USDA National Agricultural Statistics Service data.

The Oklahoma Cooperative Extension Service is one of two state agencies administered by OSU’s Division of Agricultural Sciences and Natural Resources.