Timely Soybean Planning Should Cover Wheat Drying Costs

PRINCETON, KY.
   The delay in wheat maturity and concern for later planting of double crop soybeans provides motivation to consider drying wheat with heated air this spring. A recent survey of cash prices for wheat and soybeans showed current levels near $6 and $15 per bushel, respectively. Current energy prices are slightly higher than seen last fall, with natural gas around $0.90 per ccf and LP gas around $1.65 per gallon, but the amount of moisture removed from wheat is usually less than corn, so drying costs will be similar on a per bushel basis.
   A spreadsheet was developed to help producers weigh the costs of wheat drying with the probable loss in soybean yields due to delayed planting. It takes into account grain and energy prices along with a few other related factors that are then used to calculate gross profits from the soybean crop and net returns to the wheat enterprise after subtracting drying costs. Potential yields, price and yield loss per day are considered for both crops. For wheat, a field drying rate is assumed to calculate the drying cost as harvest progresses. Of course, towards the end of harvest, wheat will usually be dry enough to store or market directly from the field (but may result in over-drying which is an additional cost) and by that time potential soybean yields will have fallen off dramatically.
   To look at an example, consider the ‘pivotal’ harvest date where potential soybean yields reach a break point. This varies from year to year depending on available heat units or degree days for crop development. You would want to start harvest several days earlier to avoid working much beyond that date and allow for harvest capacity and a few delays due to weather and/or mechanical problems. With current grain prices, average yields of 45 bushels per acre, and daily yield loss of 2.3 percent (1 bushel per acre per day), the costs of delayed planting for soybeans can be calculated. For wheat, an average yield of 85 bushels per acre with a 0.5 percent loss per day for delayed harvest can be assumed. Drying costs will vary between systems, but with current energy prices and an initial moisture level of 26 percent, the drying and handling cost would be about 30 cents per bushel (or $25 per acre). The gross return for soybeans and net return for wheat after paying for drying and handling (D & H) would be $675 and $485, respectively, which combine for $1160 per acre (shown in Table 1) when harvest begins one week before the ‘pivot’ harvest date (week 0). Each row in the table shows how these costs and returns change through a four week harvest period. Note that if harvest is delayed two weeks beyond the ideal period, returns to the operation can fall sharply due to lower potential soybean yields and over-drying cost if wheat dries in the field below the market moisture level (usually 13.5 percent).



   Data in the table are shown in more detail in Figure 1, where daily changes in soybean and wheat yield losses, wheat drying and hauling and the total of these costs are illustrated. Corresponding net returns for wheat harvest  and gross returns for the soybean crop are shown in Figure 2, where loses average about $3 per acre-day before the ‘pivot’ harvest date (due to wheat drying) and increase to about $18 per acre for each day that soybean planting is delayed afterward (due to lower yields)! For these reasons, more farmers will be interested in drying wheat this spring to boost soybean yields and net profits. More information on wheat drying and this spreadsheet is available at UK Cooperative Extension Service offices, on the Biosystems and Agricultural Engineering website (www.bae.uky.edu), or by contacting the author. ∆





   DR. SAM MCNEILL: Associate Extension Professor, University of Kentucky