A number of unanswered questions yet about the potential of Soybean in our rotation but with the assumptions I’m making so far – and I have done research with Soybeans in the past – Canola still seems poised to win substantially in the majority of weather scenarios we are likely to see going forward with a Cumulative estimated Net difference of $39/acre in favour of Canola.
I very much wanted to see Beans fit onto some of our Canola acres to hedge hot weather but walked out of the meeting with more concerns than I walked in with – all numbered below. I do believe Angie at Viterra will be able to elaborate on a number of my concerns if anyone is still interested in going forward – and seed supply will be tight, so act quickly.
Feel free to call and challenge any of my math – and also note very few people’s calculations are gong to speak to the Fertility rebate Canola provides vs the Phosphorus mining potential of Soybeans and also the very real yield drag that fewer Heat Units – regardless of how you want to measure them – will present us. Furthermore, I am granting Soybean the Price/Bushel win in all of these scenarios even though I feel that Canola will premium itself to Beans in Calendar 2013.
1. Yield is a huge wildcard with 2012 production (a Hot Wet year) exciting people towards looking at Beans vs Canola. Trend-line yields point to about a 31 bushel average with this year seeing the first 35 bushel average as a wet spring, hot summer were idea for Bean production – especially for anyone who saw a timely July-August rain. In general though there is a major concern as the Average planted Bean was a 2425 heat unit variety, and yield is very tied to Heat – however you choose to measure it. I am assuming a 4.5 bushel reduction off trend-line yields due to our inability to plant 2425 Heat Unit varieties.
2. Price – Freight into Weyburn brings the basis from $1.15/bu to about $1.50/bu netting about 50c more per bushel for Beans than Canola. If we can get the volume, we should see a better basis to Vancouver, but 2013 will see most of our Beans go to Weyburn. I believe values closer to parity are more likely than Beans remaining at a premium to Canola as Canada is about to short Canola next year and we go into the new crop with likely the tightest Stocks to Use ratio we have ever seen. They aren’t growing Canola in South America, so no White Knight on the horizon for the Canola market.
3. Seed – This one was a surprise coming in at over $100/acre and negating most of the Fertility cost savings we expected. In the seed bag is the Seed, Seed Treatment, Roundup Ready TUA (a concern of its own with Glyphosate Resistant Kochia even more a threat in Beans than it is to Canola) and the 1st of 2 needed Inoculant hits.
4. Nitrogen – Canola is priced against the needed pounds for a 30 bushel crop and any differences in yield in each scenario are captured in the Nitrogen Fertility Rebate line. For Beans, the 2nd Inoculant application is priced in the Nitrogen line. Beans need 5 lbs of Nitrogen to make a bushel while we though Canola was high at 3.2. The inoculant strain needed for Beans is neither native to Saskatchewan, nor can overwinter here.
5. Herbicide – A huge wildcard for Soybeans and only partially priced in at $20/acre if we need a full rate Basagran shot (over $20/acre) to cover off any Glyphosate resistant Kochia that 2-3 shots of Glyphosate will certainly select for this year. Liberty Link varieties will be more available for 2014 crop but I’d even rather see Conventional Beans put in the ground than an RR variety with this new resistance issue in our most important weed.
6. Fungicide – Sclerotinia is in 70% of our rotation now and Beans are susceptible to it. We don’t have to talk to too many farmers this year to know that it’s a concern and that even if Beans are only a carrier of the disease, a Fungicide app may be warranted, just as a half app (50% likelihood of being needed – not a 50% rate) is penciled in for next year’s crop of Canola. Note – that to make a 30 bushel Canola crop we likely are not so wet that we need that app, nor likely to see the same effects of the disease that a 50 bushel stand saw this year, hence the half app cost.
7. Harvest – the one area where my fears were somewhat alleviated by the meeting was that Beans are not likely to act so much like Chickpeas if we are short Heat Units but instead will just yield lower meaning we aren’t likley to need to bring in the crop Chemically. This doesn’t mean some type of Dessication is completely off the table but we’ll watch and learn on this front.
8. Fertility Rebate – Nitrogen – Canola will only remove about 60% of its Nitrogen uptake while Beans will initially leave the soil with almost nil for Nitrogen initially. I am still digging into removal rates, and may change a few numbers if I find a larger rebate than I have penciled in so far.
9. Fertility Rebate/Removal – Phosphorus – Because Beans are seeded into warm soils are a solid scavenge of Phosphorus, P is not usually needed at seeding. But Beans also use 1.2.lb of P per bushel and thus will remove a lot of P on a big crop and over 30lb on an average crop. This is an extra cost that is not felt in Canola because it’s sitting there already in the Fertility side of the sheet and because Canola pulls 20% less to start with per bushel. Too many producers are ignoring their Phosphorus upkeep.