Soybean Benchmarks: Higher Yields and Costs for the US

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Nov 24, 2022 | Agricultural Markets

Reading time: 2 minute

Center of Commercial Agriculture of Purdue University examined the competitiveness of Soybean production for crucial international Soybean regions using 2016 to 2020 data from the agri benchmark network in 2022. The cash crop network represents eleven countries with Soybean data for 2020. Costs and revenues are converted to U.S. dollars so that comparisons can be readily made. Data from six typical farms with Soybean enterprise data from Argentina, Brazil, Russia, Ukraine, and the United States (2 farms) were used in that research. These five countries were selected to simplify the illustration and discussion.

Soybeans were produced on approximately 68 percent of the typical farm’s acreage during the five-year period. The typical farm in Brazil produced corn and Soybeans in 2020. Soybeans were the first crop planted on the typical farm’s acreage during the five years. The farm in Russia produced alfalfa, chickpeas, corn, corn silage, fodder grass, Soybeans, summer barley, sugar beets, sunflowers, winter rye, and winter wheat in 2020. Soybeans were produced on approximately 18 percent of the typical farm’s acreage during the five-year period. Crops grown on the farm in Ukraine in 2020 included corn, Soybeans, sunflowers, winter rapeseed, and winter wheat. Soybeans were produced on approximately 13 percent of the typical farm’s acreage during the five years.

Although yield is only a partial gauge of performance, it reflects the available production technology across farms. The average Soybean yield for the farms from 2016 to 2020 was 2.79 metric tons per hectare (41.4 bushels per acre). Average farm yields ranged from approximately 1.48 metric tons per hectare for the typical farm in Russia (21.9 bushels per acre) to 3.94 metric tons per hectare for the typical farm in west central Indiana (58.6 bushels per acre). The U.S. farms had average Soybean yields above 3.70 metric tons per hectare (55.0 bushels per acre).

Input Cost Shares

Cost shares were broken down into three major categories: direct costs, operating costs, and overhead costs. Direct costs included seed, fertilizer, crop protection, crop insurance, and interest on these cost items. Operating expenses had labor, machinery depreciation and interest, fuel, and repairs. Overhead costs included land, building depreciation and interest, property taxes, general insurance, and miscellaneous expenditure.

The average input cost shares were 33.6% for direct cost, 33.1% for operating cost, and 33.3& for overhead cost. The typical farm in Brazil had an above-average cost share for direct cost. Operating costs as a proportion of total costs were relatively higher in Russia and Ukraine. Overhead costs as a proportion of total costs were somewhat higher in Argentina and the United States. The significant cost share for overhead costs in the U.S. reflects relatively high land costs.

The typical farms in Brazil, Ukraine, and west central Indiana exhibited economic profit during the five-year period. The typical farm in Iowa had a slight financial loss during the five years. The lowest monetary gain during the five-year period for the typical farms was in 2019, with an average economic loss of $52 per hectare. The lowest economic profit for each typical farm was as follows: 2016 for the typical farm in Brazil, 2017 for the typical farm in Ukraine, 2019 for the typical farm in west central Indiana, and 2020 for the typical farms in Argentina, Russia, and Iowa.

Yield, gross revenue, and cost were substantially higher for the U.S. farms. The typical farms in Brazil, Ukraine, and west central Indiana exhibited a positive average economic profit in 2016-2020. Soybeans were more profitable than corn during the five years for the typical farms in Brazil, Ukraine, and the United States.

Other sources: Perdue 

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