By Dr. Bob Stark, Extension Agricultural Economist; and Breana Watkins, Extension Economics Program Associate
Policy actions over the recent months have coincided with soybean market price declines. This scenario has producers reexamining their costs of production to estimate breakeven market price. An analysis using 2018 soybean cost of production budgets developed by the Arkansas Cooperative Extension Service took the Arkansas soybean statewide average booking price for the 2018 crop and calculated the breakeven yield required to cover total operating expenses. Arkansas soybean booking price utilized was $9.73 per bushel, the statewide average for November 15-December 31, 2017 on the 2018 crop. The analysis considered system combinations across three irrigation alternatives (flood, furrow, and center pivot), three seed types (Roundup Ready, Liberty Link, and Conventional), and four ownership tenure options (Farm Owner, Tenant 90-10 Crop Share, Tenant 80-20 Crop Share, and Tenant 75-25 Crop Share). Breakeven yields on irrigated soybean systems ranged from 29 to 45 bushels per acre. Non-irrigated breakeven yields spanned 23 to 36 bushels per acre. The sensitivity to market booking price changes of Net Returns to Operating Expenses was calculated by increasing and decreasing price 10, 20, and 30%. Readers should note that the net returns are to operating expenses – not total costs, including outlays to management and land. Net return outcomes across all ownership tenures for the furrow irrigated Liberty Link system at the price increments and associated breakeven yields are shown in Figure 1. (Also available here: 2018 Arkansas Breakeven Prices and Yields for Soybean Crop Enterprise Budgets).
Outcomes for other system combinations may be viewed by going to https://www.uaex.edu/farm-ranch/economics-marketing/farm-planning/on the UAEX Cooperative Extension Service website and accessing the drop-down menu under Arkansas Breakeven Prices and Yields for Soybean Cost of Production Budgets.