Soybean Planting and Risk-Return Tradeoffs in the Mid-Southern United States

This thesis is comprised of two studies on the effects of soybean (Glycine max (L.) Merr.) planting date (PD) and maturity group (MG) selection on producer expected returns. Having to replant soybean after early-season planting because of poor stand establishment is costly for producers. Replanting costs have increased in the last ten years as seed and other input costs for soybean have increased. Using five years of field trial results from two locations in Arkansas, the yield response to early and late season plant population density has been estimated to determine yield and future revenue potential for the purpose of determining whether or not replanting makes economic sense for a producer. Economically derived soybean replanting thresholds, defined as the number of plants at two or four weeks after planting for the initial planting below which replanting makes economic sense, were established for both locations. Sensitivity analyses on soybean price, seed cost, and producer replanting costs were performed to determine their relative importance on replanting thresholds. Deciding to replant earlier than four weeks after planting was suggested as the yield potential of earlier replanted soybean is higher. The replanting threshold counts, however, also need to be adjusted. In the second study, producer return variance or production risk associated with growing soybean of different maturity and at varying times during the planting season was analyzed. An efficient frontier where returns are maximized at varying levels of risk was calculated for a set of nine locations across six states using three years of data from field experiments. Because a producer can freely select what MG of soybean to plant and when to plant, risk return tradeoffs were studied for planting portfolios featuring soybeans from MG III to VI and PD ranging from as early as the beginning of April in some locations to mid-July. The median level of risk between minimal portfolio risk and the risk level of the return-maximizing MG and PD combination was solved for and expected return and risk was compared between the median-risk portfolio and the profit-maximizing portfolio. This comparison provided insight about the relative cost of risk reduction for the nine different locations. Water consumption, price seasonality, and seed oil and protein concentration were considered in the development of return estimates. Because producer planting risk preferences vary, a spreadsheet tool that can solve for efficient MG and PD planting portfolios is envisioned that will allow the parameters of the optimization to be customizable for the producer