According to the Arkansas Agricultural Statistics Service, the five-year average soybean acreage (acres planted in Arkansas) ending in 2004 is just over 3 million acres. Around 1.2 million acres were dryland or non-irrigated — almost 40 percent of Arkansas soybeans.
One of several reasons for the large amount of acreage devoted to non-irrigated beans is the reduced number of inputs required. That and the increasing value of water makes dryland soybeans an important crop on marginal ground and on productive ground that lacks adequate water. With an average yield (from 2000 to 2004) of about 26 bushels (65 percent of the irrigated yield), these beans are often profitable.
The newest wrinkle in production costs arises from a recent unwelcome immigrant commonly known as Asian soybean rust. As with most problems that arise on the farm, there are few easy solutions. According to Chris Tingle, University of Arkansas soybean agronomist, growers in the South face some risk from Asian rust.
Although, there are no resistant soybean varieties, rust can be treated with conventional fungicides. If left untreated in areas with high rust pressure, yields could be reduced by as much as 60 to 80 percent. However, if treated properly, normal yields can be expected.
Growers ask: How much is Asian rust treatment going to cost me? Here again there is no exact answer. The cost would be influenced by the regimen, the products chosen, and the method of application.
In an example we will plan on a two-shot program, assuming a cost for the fungicide at $11 per acre, and using ground application at $4 per acre. This will total $15 per acre per application.
In the accompanying figures and tables we have shown the difference in costs and returns of non-irrigated soybean production. A comparison can be made between production costs in Table 1 and Table 2.
Table 1 illustrates the production cost of non-irrigated soybeans without the two fungicide applications. Table 2 shows the increased production cost as a result of the fungicide application.
Another way of looking at this is by asking how many bushels of beans will it cost to treat for rust. At a price of $6.61 per bushel, this two-shot application would be equivalent to 4.5 bushels. That is just over 16 percent of the average dryland soybean yield of 26 bushels per acre. Since almost 40 percent of Arkansas soybeans are not irrigated, the 4.5 bushels are quite significant.
Figures 1 and 2 show the difference in profitability as yields and prices vary from an average yield of 26 bushels and an average price, for demonstration purposes, of $6.61. As the figures indicate, profitability decreases along with yield and price. Figure 2 shows a shift in profitability associated with the added cost of fungicide treatment.
As the price of beans decreases, the relative cost of treatment increases. This is not unexpected. However, not treating could result in such minimal yield that the costs associated with production could be lost.
Preparedness can make the difference in facing this potential upcoming challenge. Planning for scouting and having money set aside in case treatment becomes necessary could result in Mid-South farmers overcoming another challenge.
Scott Stiles, Rob Hogan, Kelly Bryant, and James Marshall are University of Arkansas Extension economists. Comments or questions? Call 870-460-1091 or e-mail email@example.com.