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SE WI | I haven't gotten my soybean insurance information yet. But I have been putting together a spreadsheet to determine whether it makes sense to do corn on corn or switch those acres to soybeans.
I'm a bit of a nerd so I did a Monte Carlo analysis (10,000 simulations of different prices and yields) and what I am seeing is that corn beats soybeans 60% of the time. But when I figure in the risk (standard deviation), soybeans have a higher "Sharpe Ratio" (I don't know if I'm using that correctly in this situation, but basically it's the average return of the simulations divided by the standard deviation.)
In simple terms, corn has the higher upside but greater risk while it's looking like soybeans have a much better chance of a positive return. When I factor in agronomics (crop rotation), I'm thinking that most of these "swing" acres on my operation will be going to soybeans. I'm still planting corn on the fields that were not corn last year. | |
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Corn vs beans: risk/reward.
