International references for soybean production • farmdoc daily

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It is often difficult to examine the competitiveness of soybean production in different regions of the world due to the lack of comparable data and agreement on what should be measured. To be useful, international data must be expressed in common production units and converted into a common currency. In addition, production and cost measures should be defined consistently across all production regions or farms.

This article examines the competitiveness of soybean production for important international soybean regions using data from 2015 to 2019 from the agri reference network. An earlier article examined international benchmarks for the period 2013 to 2017 (farmdoc every day May 22, 2019). the agri reference The network collects data on beef, cash crops, dairy, pork and poultry, horticulture and organic products. There are 23 countries with data for 2019 represented in the Cash Crops Network. the agri reference The concept of typical farms was developed to understand and compare current agricultural production systems around the world. Participating countries follow a standard procedure for establishing typical agricultural holdings that are representative of shares of national agricultural production and classified by production system or combination of enterprises and structural characteristics. Costs and revenues are converted to US dollars so that comparisons can be easily made. Data from six typical farms with data on soybean companies in Argentina, Brazil, Russia, Ukraine, and the United States were used in this article. It is important to note that data on soybean companies is collected in other countries. These five countries have been selected for ease of illustration and discussion.

Farm and country abbreviations used in this document are listed in Table 1. Although farms can produce a variety of crops, this document only considers soybean production. Typical farms used in the agri reference are defined by the acronym of the country and the hectares of the farm. To fully understand the relative importance of the soybean business on each typical farm, it is helpful to note all the crops produced. The typical farm in Argentina produced corn, soybeans, sunflowers, winter barley and winter wheat in 2019. Soybeans were produced on about 38 percent of the typical farm area in during the five-year period. The typical Brazilian farm produced corn and soybeans in 2019. Soybeans were the first crop planted on the entire area of ​​the typical farm during the five-year period. The farm in Russia produced alfalfa, chickpeas, corn, corn silage, forage grass, soybeans, summer barley, sugar beets, sunflowers, winter rye and winter wheat in 2019. Soybeans were produced on about 20 percent of the typical farm area during the five-year period. Crops produced on the farm in Ukraine in 2019 included corn, soybeans, sunflowers, winter rapeseed and winter wheat. Soybeans were produced on about 16 percent of the typical farm area over the five-year period. There are four US farms with soybeans in the network. The two farms used to illustrate soybean production in this article are the Typical Iowa Farm (US700) and the Typical Midwestern Indiana Farm (US1215). These two farms use a corn / soybean rotation.

Soy yields

Although yield is only a partial indicator of performance, it reflects the production technology available on farms. The average soybean yield for farms from 2015 to 2019 was 3.17 metric tonnes per hectare (47.1 bushels per acre). Average crop yields ranged from about 1.55 metric tons per hectare for the typical farm in Russia (23.1 bushels per acre) to 3.89 metric tons per hectare for the typical farm in Argentina (57.9 bushels per acre). ). Figure 1 illustrates the average soybean yield for each typical farm. The two US farms had average soybean yields of over 3.75 metric tonnes per hectare (55.8 bushels per acre).

Share of entry costs

Due to differences in technology adoption, input prices, fertility levels, farmer efficiency, trade policy restrictions, exchange rate effects and labor market constraints and capital, the use of inputs varies among soybean farms. Figure 2 shows the average input cost shares for each farm. The cost shares were broken down into three broad categories: direct costs, operating costs and overheads. Direct costs included seeds, fertilizers, crop protection, crop insurance, and interest on these cost items. Operating costs included labor, depreciation and interest on machinery, fuel and repairs. General expenses included the land, depreciation and interest on the building, property taxes, general insurance and miscellaneous costs.

The average share of input costs was 34.3% for direct costs, 30.8% for operating costs and 34.8% for overheads. Typical farms in Brazil and Ukraine had above average cost shares for direct costs. Operating costs as a proportion of total costs were relatively higher in Russia and Ukraine. Overheads as a proportion of total costs were relatively higher in Argentina and the United States. The relatively large share of overhead in the US reflects our relatively high cost of land.

Income and cost

Figure 3 shows the average gross revenues and costs for each typical farm. Gross revenues and costs are shown in US dollars per hectare. It is clear from Figure 3 that the gross income per hectare is significantly higher for the two US farms. However, the cost is also significantly higher for these two farms. All of the typical farms except the Iowa farm showed economic benefits over the five-year period. The typical Iowa farm had virtually no economic profit. The lowest economic benefit over the five-year period for typical farms was 2015 with an average economic benefit of $ 26 per hectare. The lowest economic benefit for each typical farm was as follows: 2015 for typical farms in Ukraine and the United States, 2016 for typical farms in Argentina and Brazil and 2019 for the typical farm in Russia.

All of the typical farms in Table 1 also produced corn during the five-year period. For typical farms in Brazil and the United States, average soybean profits exceeded average corn profits over the five-year period. The biggest difference in favor of soybeans occurred for the typical farm in Brazil (difference of $ 231 per hectare). The second and third largest differences were seen on typical farms in Indiana ($ 206 difference per hectare) and Iowa ($ 41 difference per hectare). Average corn profits were $ 100 per hectare higher in Argentina, $ 43 per hectare more in Russia, and $ 15 per hectare more in Ukraine.

Figure 4 shows the average gross income and cost of soybeans per tonne. The gross income per tonne was relatively higher for the typical Ukrainian farm and the two typical US farms. However, the two typical American farms also had relatively higher costs per tonne. The economic profit for the five-year period was positive for all typical farms except the Iowa farm.

Conclusion

This article examined the yield, gross income and cost of farms in the agri reference network of Argentina, Brazil, Russia, Ukraine and the United States with data on soybean companies. Yield, gross income, and cost were considerably higher for American farms. All typical farms except the Iowa farm posted positive average economic profit over the period 2015 to 2019. Data for 2020 will be available in early fall. It will be interesting to see how the high crop prices that occurred at the end of 2020 impact the comparative results.

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