By Andi Anderson
As planting season nears, many farmers focus on the corn-soybean ratio to guide crop choices. This ratio compares the market value of soybeans to corn by dividing the soybean price by the corn price.
A benchmark ratio of 2.5 often helps identify which crop may offer better returns. If the ratio is above 2.5, soybeans may be more profitable. If below, corn may be the better choice.
However, this ratio only works when the right price data is used. Many farmers use national cash or futures prices, but these may differ from local market prices, which impact the actual return.
For example, Michigan’s ratios often vary from national averages due to local demand. In March 2025, the national futures-based ratio was 2.20, while local cash prices in Michigan showed a ratio of 2.28. Both suggest corn is more profitable, but this may change in different years or regions.
The ratio also does not include input costs. Corn often needs more fertilizer, especially nitrogen, and spring fertilizer prices tend to be high. Understanding production costs is essential before planting.
In times of market volatility, like during global supply chain shifts between 2020 and 2023, local crop demands may influence pricing differently.
Cash flow is another important factor. Farms with limited access to cash or credit may choose the crop with lower upfront costs, even if the ratio suggests otherwise.
In conclusion, the corn-soybean ratio is a useful guide, but farmers should also review local market trends, production expenses, and available cash. When combined, these tools help build a solid planting strategy and improve farm profitability.
Photo Credit: gettyimages-dszc
Categories: Michigan, Sustainable Agriculture