Break Crop Relationships January 31, 2014 12:00 am It is worth looking at the relative profitability of break crops because they are changing out of their ‘normal’ positions in the price matrix. Looking at the ex-farm prices over the last 12 months, we notice the price of beans has been steadily improving relative to other crops in the matrix. Only 12 months ago, oilseed rape price was two thirds as much again as feed beans, feed beans meanwhile were only worth 20% more than feed wheat (but at half the yield). However, since then, the demand for beans has steadily and quietly increased leaving oilseed rape only slightly (16%) more expensive than feed beans and beans two thirds as much again as feed wheat. Taking the yield advantage and lower costs of production of beans over oilseed rape, currently, a mediocre crop of beans (spring or winter) is likely to return a higher gross margin than winter oilseed rape. This is demonstrated in the chart below using fixed yields and costs from the John Nix Pocketbook and prevailing monthly prices. Whether this will change the spring cropping decisions for this year is unclear but with most oilseed rape planted, there might be little opportunity to plant more beans for 2014. BREAK CROP RELATIVE MARGINS – Source: John Nix Pocketbook
