Like many farmers around the nation, Eric Van Tuyle is in a waiting game.
For the next month or so, he’ll keep careful tabs on the weather and the condition of his fields around Roodhouse, Ill., looking for the right time to start planting corn.
But he’ll also be watching the commodity markets for help in figuring out just how heavily he should invest in the crop.
Van Tuyle, 64, has been farming the area pretty much all his life. In a typical year, he splits his acreage with 85 percent going to corn and the rest to soybeans. But with corn prices in the tank — about half of what they were a couple of years ago — he’s looking to boost soybean acres as high as 35 percent this year.
It’s not as if he’s all that confident in soybeans. Those prices are down, too. But he said it costs considerably less to grow them — about a fourth the cost of corn.
“If I’m going to get a zero or negative return, I’m going to put as little as possible into it,” Van Tuyle said.
And there’s always a chance things could take a turn between now and early May, when he needs to make a decision on the corn, which goes into the ground a couple of months before soybeans.
It’s a quandary for farmers, who face another year of declining income and steady, if not rising, production costs. The problem is that record harvests have generated a glut of corn and soybeans, driving prices down to the point where some tracts of land simply can’t turn a profit, once production costs are factored in.
Just three summers ago, corn sold for $8 a bushel. More recently, prices have fallen below $4 — perilously close to the break-even point for many corn farmers.
As a result, profit for farmers is expected to drop by more than 30 percent this year, according to a recent report by the U.S. Department of Agriculture.
That’s forcing farmers to shift acreage to minimize losses or, in some cases, to jump into alternate crops such as sorghum, where demand is still rising.
But the biggest change is likely to a movement from corn to soybeans, according to a recent survey by Farm Futures, a company that specializes in agricultural publications.
The company asked 1,300 growers about their planting intentions for the coming year. The results show a 2.5 percent drop in corn acreage and a 4.2 percent increase in soybeans, putting the crop at a record 87.25 million acres.
Still, there’s been a dampening of the enthusiasm for soybeans since January, when a similar survey had farmers with more than 88 million acres. The problem is that bean prices have continued to slip, taking away some of the incentive to switch.
“Soybeans are actually penciling out to a larger loss than corn,” said Bryce Knorr, senior market analyst for Farm Futures. “It has farmers rethinking the extent of the soybean expansion a little bit.”