On the face of it, statistics show that corn generates a higher gross revenue than soybeans, said Kansas State University agricultural economist Bill Tierney.

"But while corn generates a higher gross revenue than soybeans, corn does not appear to be the most profitable crop for 2001," he said.

Using corn and soybean data from key producing states Illinois, Iowa, Indiana, Michigan, Minnesota, Missouri and Ohio, Tierney, who is the crops marketing specialist with K-State Research and Extension, said that based on government cost-return budgets for the north central U.S. [excluding direct government payments], corn has had a higher economic return per acre, relative to soybeans, in only two years – 1975 and 1979.

He based the estimates for crop returns on several assumptions such as the current 2001 Chicago Board of Trade December corn futures, adjusted for regional basis, and the soybean loan rate – since November soybean futures less basis were already below loan.

Other assumptions Tierney took into account were expected fertilizer prices and "trend" yields.

"Based on this analysis, corn is projected to suffer economic losses of $65 per acre versus soybean’s losses of $11 per acre," he said. "Assuming that corn and soybean prices will move roughly in step with each other, corn will not be the more profitable crop until cash corn prices rise to $2.65 per bushel versus soybean’s assumed price of $5.25."

"Corn could become the more profitable crop, however, if corn prices move in a fashion dramatically different from soybeans," the economist said.

The advantage that soybeans has over corn is greater if one assumes that crop prices will fall below loan rates next year, he added.

"Plugging in the national average loan rate for 2001 corn and soybeans – $1.89 and $5.26, respectively – gives soybeans a $106 per acre advantage over corn," Tierney said.

For further information, interested persons can visit http://www.agecon.ksu.edu/risk