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Corn+Soybean Digest

Nebraska Irrigators Shift To Soybeans

Before the 1996 Farm Bill, Duane Keller was what you would call a corn man. “I was 100% corn,” the Aurora, NE, grower says. But no more. Keller is one of several growers planting more soybeans. Beginning shortly after the implementation of the 1996 Farm Bill, Keller has gradually shifted to more soybeans — to the point that this spring he will plant slightly more beans than corn.

During a time when U.S. soybean acres have lost ground to corn most years, Nebraska acres have done just the opposite. What's caused this?

“Primarily, a response at the time to the 1996 farm program, Freedom to Farm,” says University of Nebraska economist Douglas Jose. “Without the planted acreage requirements, there was a shift to more rotation planting, primarily a 50-50 corn/soybean rotation,” he says.

Keller, who irrigates his crops, agrees that prior to the 1996 Farm Bill, “I planted for the farm program because of my corn base.” He couldn't afford to jeopardize his government payments, which were based on planting his base acres, all of which were in corn. But now that payments are no longer based on what he plants, Keller has shifted to more beans to boost profitability.

One of the big advantages in shifting to beans, he says, is reduced input costs, particularly nitrogen fertilizer. All input costs related to energy have been reduced, Keller says, so he's been able to rein in total production costs at a time when energy costs have skyrocketed.

Keller is in good company. In Hamilton County, where he farms about 70 miles west of Lincoln, there were few soybeans grown a decade ago, says Extension Agent Andy Christiansen. Today, soybeans command an impressive 30-40% of total crop acres (see sidebar). Another advantage in shifting acres to soybeans, he says, is the fact that beans require less irrigation, an important factor when energy costs are high. Most crops grown in Hamilton County are irrigated.

Yet another bonus for soybeans is that irrigators are getting great yields. And they like that growing both corn and soybeans helps spread out their workload.

Another factor that has led to an increase in soybean acres is the improvement in soybean germplasm that has boosted yields in recent years and made soybeans more competitive with corn, says Gregg Fujan, chairman of the Nebraska Soybean Board.

Kent Kauffman, too, grew virtually no beans a decade ago — “I was 99% corn” — but now he's right at 50-50. The reason? “Economics.” And part of the new positive soybean economics, the Aurora, NE, grower says, is due to Roundup Ready soybeans that “have cured a lot of weed problems and reduced a lot of trips through the field.” Kauffman says that because soybeans use 20-25% less water per bushel than corn, growing beans reduces pumping costs, a growing issue in the state.

Kauffman also says shifting from continuous corn to a corn/soybean rotation “reduces your risk by not putting all your eggs in one basket.” In addition, he says soybeans don't have the drying costs of corn, which “have escalated out of sight.” Soybeans also don't present the storage issues corn does because “you're producing one-third of the bushels, so your bins go three times as far,” he says.

Yet despite these advantages, he agrees with Keller and others, who say that without the 1996 Farm Bill's Freedom to Farm, he wouldn't have shifted to soybeans because he was locked into growing corn due to his corn base.

Kauffman says that despite the large shift to soybeans in his area in recent years, one factor could shift more acres back into corn — ethanol plants. “We're in the hotbed of ethanol here, and if we find ourselves in a position of no corn basis, acres could shift back because prices would go up.” He notes, for example, that in the Texas Panhandle all corn that producers nearby grow goes to livestock feedlots that pay above the Chicago Board of Trade price. “Right now, that's not happening with ethanol plants, but it could,” he says.

Water Rights A Growing Issue

Gregg Fujan, chairman of the Nebraska Soybean Board, says one reason why growers are switching to more soybeans is that top bean yields can be produced with less water than what's needed for corn, a big issue in southern Nebraska where having access to irrigation water is a big concern.

Water rights in particular are becoming an issue for growers whose source of irrigation water is the Republican River Basin, Fujan says, but it's rapidly becoming a statewide issue.

Another area where growers are having a difficult time obtaining adequate irrigation water needed for growing crops is canal water generated by Lake McConaughy, north of Ogallala, notes Kent Kauffman, a grower in Hamilton County. Because of the lack of water from the Rocky Mountains, the lake is low and, as a result, the amount of water in irrigation canals in restricted.

Soybean Acres Come From Corn

Increasingly, Nebraska corn acres — in particular those irrigated — have been shifting to soybeans since the passage of the 1996 Farm Bill.

Nebraska irrigated harvested soybean acres have more than doubled from 1996 to 2004 (the latest data available) from 895,000 to 2,180,000 acres.

The shift has been more pronounced in counties where most crops are irrigated.

In Hamilton County there was more than a five-fold increase in irrigated soybean acres from 1996 to 2004 — from 15,000 to 87,300 acres. Total soybean acres for the county increased from 19,500 to 97,700 during that time. In that same period, total corn acres in the county fell 63,100 acres.

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