Soybean Production Risk Snapshots
Potential risks abound at every step of soybean production and business management. Understanding key risk factors helps producers invest time, energy and resources to mitigate them. These snapshots include considerations for the 2020 growing season and beyond.
Counteract Cloudy Days with Management
As a photoperiod-sensitive crop, soybean vegetative growth, flowering and pod fill all depend on absorbing sunlight.
“The Illinois Climate Network stations measure incoming shortwave, or solar, radiation, which depends on latitude, time of year and atmospheric conditions like cloudiness,” says Illinois State Climatologist Trent Ford, Ph.D. “If we compare stations over the same time of the year, differences in solar radiation from year to year can be used as a proxy for cloudiness. The extent and thickness of clouds impacts the amount of solar radiation that reaches the surface. In general, the higher the frequency of cloudy days the lower overall solar radiation will be.”
While farmers can’t control the number of sunny versus cloudy days during the growing season, management practices can position the crop for success. For example, twin rows can encourage sunlight penetration through as much of the crop canopy as possible, and some strobilurin fungicides have shown the ability to increase photosynthesis
Strip-Till to Maximize Soil Benefits
To till or not to till? Which is best for soybean yields? For soil health?
According to Stephanie Porter, Golden Harvest agronomist, strip-till production could be an option for the future of soybean production.
- Takes advantage of quality equipment and technology for residue cutting, coulters and row cleaners in soybeans
- Alleviates risks with cold soils for earlier planting
- Improves emergence, vigor and stands
- Reduces soil erosion
- Releases less carbon and maintains organic matter
- Reduces or prevents compaction
- Conserves energy, fuel time and money compared to tillage
- Increases fertilizer efficiency
- Works well with cover crops
- Improves root growth and development
- Boosts soil biological activity and health
Scout and Test for Common Pests
“The two biggest pests in Illinois soybean production are sudden death syndrome (SDS) and soybean cyst nematode (SCN),” says Jason Carr, CCA Soy Envoy and Bayer technology development representative, based in El Paso, Illinois. “And they are closely associated. SCN is found in every county in Illinois and damages soybean roots, making them more susceptible to SDS infections. Genetics help protect soybeans, but these pests have been developing resistance to some genetics. Farmers must continue scouting fields and testing soil to stay ahead of them.”
Grade Marketing Performance to Improve Decision-Making
After the fact, looking at how crop marketing decisions were made can increase confidence in the soybean sales process for next year and beyond, according to Eric Osterhaus, principal with K·Coe Isom. He offers several considerations for a crop marketing report card:
- What was decided and when?
- Were decisions proactive or reactive to the market?
- How effectively were cash tools, or physical crop contracts, used to take advantage of markets?
- How effectively were paper tools, like options and futures, used to reduce risk?
- Did or would an outside advisor improve marketing decisions?
Strengthen Financial Planning with Input Costs Estimates
Estimating costs of soybean production provides key information to formulate a strong marketing plan for the year ahead. This chart shows how Iowa State University estimated costs of soybean production for 2019, accounting for volume and early purchase discounts. It provides a starting point for Illinois soybean producers to calculate estimated costs for 2020 production.
Monitor Interest Rates for Opportunities
“Based on Federal Reserve trends, interest rates for farm operating loans have been loosening, and are likely to hold,” says Tanner Ehmke, manager, CoBank Knowledge Exchange. “The risk of rates increasing is low, and the chances of them dropping is moderate. When rates are trending lower, farmers may want to consider locking those rates in for long-term debt.”