Fall 2024 Wheat Planting Decision
Fall 2024 Wheat Planting Decision
Corn harvest is now underway and Kentucky grain farmers will soon decide if and how much wheat they will plant this fall. Compared to last year there is a drop in both soybean and wheat prices, a drop in fuel price, and mostly stable fertilizer prices. The following analysis quantifies these relative changes to estimate the profitability of crops harvested in 2025. The analysis includes estimated returns comparing double-cropped wheat/soybeans with full-season soybeans for the 2025 crop, and the likely implications for Kentucky grain farmers.
Additional costs associated with double-cropping are accounted for, including fuel, fertilizer, herbicides, machinery repairs and depreciation[1], labor, hauling, etc. The analysis assumes a blended mix of selling directly from the field and selling from storage for both wheat and soybeans, as well as expected basis for each crop with those scenarios. This results in 2025 crop blended prices of $5.85/bu for wheat and $10.70/bu for soybeans given Future’s prices at the close of 9/24/24.
Two regions with different agronomic characteristics are evaluated. The first region is along the southwest tier of counties roughly between I-24 and I-65, which traditionally does a lot of double-cropping. The second region is the northwest tier of Kentucky counties (Ohio Valley region) that has some of the best yields for corn and soybeans, but traditionally plants less wheat. Cash rent is assumed to be $200/acre for both these regions for the average ground and $250/acre on the best ground (note: this will vary substantially, but is done here for illustrative purposes only). Other major assumptions are: $3.00/gallon fuel, 50-mile one-way grain hauling, $.54/unit N, $.58/unit P, and $.38/unit K.
Southwest Tier Assumptions (Average Ground):
72 bu wheat
42 bu double-cropped soybeans
50 bu full-season soybeans
Resulting net profits:
- $9 double-crop
- $50 full-season soybeans
This results in a $41 difference in favor of full-season soybeans. The double-cropped soybean yield would have to increase to 46 bu before the double-crop was as profitable. This would equate to a 8% yield loss of double-cropped soybeans compared to full-season soybeans.
Southwest Tier Assumptions (Best Ground):
90 bu wheat
51 bu double-cropped soybeans
60 bu full-season soybeans
Resulting net profits:
+$91 double-crop
+$43 full-season soybeans
This results in a $48 difference in favor of the wheat-soybean double-crop. The double-cropped soybean yield could drop down to 46 bu before full-season soybeans were as profitable. This would equate to a 23% yield loss of double-cropped soybeans compared to full-season soybeans.
Northwest Tier Assumptions (Average Ground):
65 bu wheat
42 bu double-cropped soybeans
50 bu full-season soybeans
Resulting net profits:
- $89 double-crop
- $9 full-season soybeans
This results in a $80 difference in favor of full-season soybeans. The double-cropped soybean yield would have to increase to 50 bu in this case before the double-crop was as profitable. This would mean there would have to be no yield loss of double-cropped soybeans compared to full-season soybeans before the double-crop was as profitable.
Northwest Tier Assumptions (Best Ground):
75 bu wheat
51 bu double-cropped soybeans
60 bu full-season soybeans
Resulting net profits:
+$8 double-crop
+$43 full-season soybeans
This results in a $35 difference in favor of full-season soybeans. The double-cropped soybean yield would have to increase to 55 bu in this case before the double-crop was as profitable. This would equate to a 9% yield loss of double-cropped soybeans compared to full-season soybeans.
Summary-Recommendations: Given the current expected market conditions (9/24/24), planting wheat looks attractive this fall only on the best ground in the Southwest Tier. On average ground in the Southwest Tier and the best ground in the Northwest Tier there was a moderate advantage to full-season soybeans. On average ground in the Northwest Tier there was a clear advantage for full-season soybeans. These results are similar to last fall in terms of the relative profitability between the two systems. However, overall profitability is down substantially in all scenarios compared to last year given the drop in commodity prices.
This analysis does not account for potential payments from Farm Bill programs. However, these programs would pay on base acre crop allocation and not planted acres, so there would be no effect on the planting decision. This analysis also does not account for the potential of harvesting straw, which is typically more common in Central Kentucky.
To change the assumptions above to your specific conditions and evaluate your expected profitability, go to the budget site at https://agecon.ca.uky.edu/extension/publications-budgets-decision-aids. The Corn-Soybean Budgets and Wheat Budgets can be downloaded or opened directly from this page.
[1] $20/acre was deducted from the double-crop scenario to account for fixed depreciation on the wheat enterprise that should not factor into the wheat planting decision.
Recommended Citation Format:
Halich, G. "Fall 2024 Wheat Planting Decision." Economic and Policy Update (24):9, Department of Agricultural Economics, University of Kentucky, September 27, 2024.
Author(s) Contact Information:
Grains Management & Finance
