Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
February 26, 1971
The Southern Corn Leaf Blight-Some Economic Considerations
HOW SHOULD I ADJUST my
crop program in 1971 in anticipation of probable reoccurrence of
the blight? Should I grow more
soybeans? What about growing
some sorghum? Should I participate in the "set-aside" program?
What about growing some Fo
corn?
Trends in Crop Production
Corn acreage has been decreas-
2 ing and bean acreage has been increasing during the past 20 years
in the South.
In the Corn Belt, acreage was
about the same in the late 1960's
as in the late 1940's in spite of a
large diversion of corn acreage
under the Feed Grain Program.
Soybean acreage in the Corn Belt
has been increasing, but percentage-wise, not nearly as rapidly as
in some of the southern states.
These long term shifts in crop
production are expected to continue and in fact be speeded up
by: (a) recent changes in the
Feed Grain Land Diversion Program, and (b) impact of the
Southern Corn Leaf Blight.
1970 Corn-Soybean
Yield Relationships
The long time seasonal average
normal yield relationship between
corn and soybeans in Indiana is
fe     about 100 bushels of corn per 33
bushels   of   soybeans.    However,
by Paul R. Robbins
Department of Agricultural Economics
because of the blight situation in
1970, soybean yields averaged
about 42 per cent of corn yields.
Also for 1970, looking at a sample
of states representing various sections of the country, soybean
yields as a percentage of corn
yields, ranged from a low of 23 in
Wisconsin to a high of 113 per
cent in Alabama   (Table 1).
Yield relationship of these two
crops in 1970 on any individual
farm will have considerable impact on the farmer as he attempts
to   determine   what   to   plant   in
1971. This yield relationship maybe particularly important when
the farmer is deciding between
planting soybeans and blight susceptible corn.
In looking at the yield relations
in Table 1, corn is a good alternative to many farmers in the
Lake States and the northern and
Table   1.    Yield  relationships  for
selected states in 1970
Soybean yield
as per cent of
State
corn yield
Wisconsin
23
Minnesota
31
Ohio
37
Iowa
37
Illinois
40
Indiana
42
Kentucky
56
Georgia
S3
Mississippi
108
Alabama
1 13
western parts of the Corn Belt.
Soybeans are a very good alternative to many farmers in the South.
The decision on whether to grow
corn or soybeans will be most difficult across the central and southern parts of the Corn Belt in 1971.
Corn-Soybean Price Relationships
During the last 5 years of the
1960's, the Indiana price of soybeans averaged 2.3 times the price
of corn. Odds seem to favor a
more narrow corn-soybean price
relationship in the fall of 1971.
In mid-February 1971, the futures
markets supported local central
Indiana contract prices for fall
1971 delivery of about $2.70 for
soybeans and $1.35 for corn
(beans twice the price of corn).
This narrowing of the spread
between corn and soybeans greatly effects the relative profitableness of these two crops. With corn
and soybean prices that prevailed
from 1965-69, a 40-bushel soybean
yield and 122-bushel corn yield
were about equally profitable.
But based on the fall 1971 corn-
soybean futures price relationships, a 99-bushel corn yield
should be about equally profitable
with a 40-bushel soybean yield.
Grain  Sorghum  as a
Substitute for Corn
Yields being attained on research   plots   and   on   a   limited