By Paul Burgener
Extension Ag Economist
University of Nebraska
Panhandle Research and Extension Center
As we move into the second spring with strong crop prices across the board, the competition for planted acres remains strong.
In the spring of 2007, prices were high, and producers were faced with difficult planting decisions.
In our region, dry bean acres dropped off, while corn acres increased, and sugarbeet acres dropped by the amount of overplant allowed in 2006.
In 2008, we have even higher prices and have seen some changes in what producers intend to plant.
We are expected to increase dry beans and reduce corn acres after a lackluster local corn crop in 2007.
Sugarbeet acres were expected to hold steady, but three consecutive weekends of frost may be challenging the sugar producers, and could see some of those nearly 20,000 acres move into corn or dry beans.
That, in a nutshell, is the answer to a difficult question, but what is driving these decisions at the present time.
The December corn futures are at $6.29 per bushel today, up from $4.50 per bushel just five months ago, but off from the contract high of $6.50 per bushel. This price level has pressured the competing crops to bid for acres in this high priced market. Great Northern beans are priced at $40.00 per cwt today, while pinto beans are priced at $32.00 per cwt. July winter wheat is at $8.30 per bushel, off from a high of $12.77 per bushel earlier this spring. Sugar price has also moved upward over the past year to compete for acres entering this season.
Table 1 shows the expected net return from 190 bushel corn at $6.29 per acre and the expected net return from the competing crops in the area.
Dry beans are the only crop that is consistently more profitable than corn in this area. The $40.00 per cwt price puts Great Northern beans nearly $50.00 per acre more profitable than corn as we move into the 2008 crop year assuming that corn is sold at $6.29 per bushel.
All of the key irrigated crops in the region appear to be profitable with net returns near $300.00 per acre or more.
These calculations are based on budgets completed at the Panhandle Center by Tom Holman and Paul Burgener in April 2008.
Based on the potential for profitability, the Nebraska dry bean acres are projected to increase in 2008 (Table 2), although they are not expected to return to 2006 levels.
Total U.S. acres are expected to continue to decline. The U.S decline should bring continued strength to the market, and offer local growers an opportunity for continued highly profitable dry bean production.
Sugarbeet acres that may be planted to another crop after the recent series of cold Saturday nights may increase the number of dry bean acres even further.
Continued strength in the dry bean markets, along with lower production costs and water use, will allow dry beans to compete very favorably with the other options in Western Nebraska.