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Corn Status

July 19, 2011 1 comment

We’re somewhere around the midway mark for the 2011 growing season. Every season has challenges, and this one has been no different. Unlike last year, we did not get the crop planted very early in this area. Most of the month of April was lost to excessive rain, and we had a lot of stop and go in May. After a stretch of good weather towards the end of the month, we did finally get everything planted. The month of June was pretty good growing weather, and aside from some concerns about a lack of rainfall in July, I was really pleased with the way the crop was developing. Until about 8am on July 11.

We had a very large derecho blow through the area with straight line winds upwards of 70mph. A lot of corn fields experience some degree of root lodging. In the field above, the rows of the non-Bt refuge corn was severely lodged, while the rows of corn that contained Bt genes for corn rootworm resistance remained mostly upright. I don’t think this issue was as much to do with the lack of rootworm resistance as it was simply due to a difference in hybrids; the hybrid being used for refuge in this field is known for being a little weak in the roots, and susceptible to root lodging.

Root lodging

What was of greater concern to me was the amount of greensnap I found in some fields.

When corn greensnaps like this, it doesn’t grow back. This will be a dead plant. Sometimes, the stalk will bend over and pinch itself off; plants like this will also usually die. If you have 10% greensnap in a field, you have 10% less yield. Some fields in the area had spots of 30% greensnap. Not good; when these same fields looked amazing just before the storm…there was some really high yield potential in this area. Not as much, anymore.

Remember my concern about lack of rainfall? This huge storm that blew through left us a quarter inch of rain or less. An insult. That’s about the sum total of the rainfall I’ve had in July. The corn here is now tasselling, the temperature is 95 degrees, and we haven’t had any significant rainfall in a month. Corn trying to pollinate under severe heat and moisture stress is not a good thing. Overnight temperatures in the 80s are also not good for corn; it needs a chance to breathe at night. Pollination while being blowtorched by this week of 90 degree temperatures will reduce yields further.

There’s still the potential for a decent, if not spectacular crop, but we really need a rain this week. It’s a typical farmer thing: we complain about too much rain in the spring, and then turn right around and bitch about lack of rain in the summer.

Categories: Agriculture, Weather Tags: , ,

Progress Report

April 19, 2011 Leave a comment

There really is no progress to report, as far as planting is concerned. We had a good run on fertilizer last week; we’re about halfway through anhydrous ammonia applications, and I’m down to less than 1,000 acres of dry fertilizer to spread. That came to a halt on Friday; it was too windy to spread fertilizer, and by 3pm it was raining. It hasn’t really stopped raining for very long since then, and yesterday morning I woke up to a scary site for April 18th:

A little over 2 inches of wet, heavy, sloppy snow. It was all melted by afternoon. As I write this morning, it is just above freezing, and it is once again raining. Not very nice late April weather, and certainly not conducive to corn planting. The state of Illinois is apparently 9% planted, but in the two or three counties I deal with in northern Illinois, I’d estimate 0-1%. Last year we were probably 30%. Big difference. April is usually my busiest month, but  it looks like May is going to take the prize this year as we continue to push planting further back.

2011 Corn Production Cost, Redux

March 7, 2011 1 comment

Back in December, I wrote this blog entry on the production cost for corn in 2011. It has been the single most popular entry I’ve written, and I get hits on it every day from Google searches. With corn planting going on down south, and with early April planting just a month away for those of us in the ‘I’ states, I thought I would revisit the subject.

The biggest change from December to this point in early March is the price of a bushel of corn. The futures markets have been wild over the past couple of months, and that trend looks like it is going to continue. Back in December, at the elevator I work for, we were contracting November 2011 corn for $4.80 a bushel. As of last Friday (the markets have not yet opened for Monday, as I write this), we were paying $5.50 a bushel. Most of the run-up in corn prices over the last couple of months have been in what we call ‘old crop’ corn–the corn that was harvested in the fall of 2010. We’re paying $6.73 for that corn, if it’s delivered to us right now.

Why the increase? Strong demand, for one, both in the export market, and in the domestic market. Ethanol, which uses over a third of the US corn crop, is doing well thanks to the huge increase in gas prices. World grain stocks are tight right now, thanks to a lot of different factors, so the pressure to produce a lot of corn this year is on. It seems like strong prices will be with us for a while. The market is so volatile that we will surely see more huge price swings before the crop is in. The March 31th USDA Prospective Plantings Report will probably provide fuel to the fire for a swing (up? down? Who knows), and any minor hiccup in the weather during planting could send prices rocketing higher. And let’s not even mention that D word…(drought).

Fertilizer prices have also increased since December. Most of my customers, and I imagine most farmers, have already booked or paid for their fertilizer for this spring. So in most cases, those costs are already locked in. I estimated a fertilizer cost of $177 an acre in December; current prices put that figure closer to $200 an acre. As it stands right now, the price of corn has still risen more than the price of the fertilizer required to produce it.

Bottom line? Taking my figures from the previous blog, factoring in the increase in fertilizer cost and an extra $5 an acre for fuel costs (too low? Not sure) gives us a total cost of $667 to produce an acre of corn. On the revenue side, increasing the price of corn to $5.50 gives us a whopping $990 an acre, compared to the $889 I calculated in December. Gross revenue of $323 an acre makes this a potentially very profitable year for our nation’s corn farmers. Remember, these numbers are an estimate, and can vary widely between regions, states, and individual farmers.

There’s a lot of money on the table this year, and I’m eager to get started. Here’s hoping for good weather in March so we can get spring fertilizer application under way!

Categories: Agriculture Tags: ,

On Sulfur

February 24, 2011 Leave a comment

Non-ag readers: Geeky agronomy content ahead! You’ve been warned.

Sulfur is an important plant nutrient in all of the crops that we grow: corn, wheat, alfalfa, and even soybeans. Corn, for example, will remove 12 lbs of sulfur for a 180 bushel corn crop. Alfalfa is a very heavy user of sulfur, removing 5lbs of sulfur per ton of alfalfa…that could be 20-40lbs per year, depending on your alfalfa cut schedule and yield. In a nutrient hierarchy, it ranks about 4th in importance, behind nitrogen, phosphorus, and potassium.

Sulfur deposition

Yet, up until recently, I’ve rarely talked about sulfur with my customers. One reason is scale; that same 180 bushel corn crop requires 150-200 lbs of nitrogen, 77lbs of phosphorus, and 50lbs of potassium. We put our focus where the most nutrients where required. Another reason is that for many years, we have to some degree depended on air pollution to provide us with sulfur fertilizer. Coal-fired coal plants used to be prodigious producers of sulfur dioxide, which led to acid rain, which led to sulfur deposition on the soil, and sulfur availability for our crops.

With most coal plants now having scrubbers installed to reduce sulfur dioxide emissions, our ‘free’ source of sulfur fertilizer has diminished. I’ve been seeing a lot of sulfur deficiencies in corn over the last couple of years during certain parts of the growing season. From a distance, it can easily be mistaken for nitrogen deficiency, but when you get up close, the interveinal yellowing is obvious.

Sulfur deficient corn

Luckily, there are many commercially available sources of sulfur that we can apply to our crops. If you are near a large coal plant, as I am, you may even have access to the synthetic gypsum that many power plants generate as a result of their sulfur scrubbing process. Fertilizer grade ammonium sulfate should be readily available at many fertilizer dealerships. You can also get liquid ammonium thiosulfate. I generally recommend avoided elemental sulfur: while it is a high anaylsis (90% sulfur, compared to 24% or 26% for the sulfate products), it has to convert to a sulfate form in the soil in order to be available to the plant. This takes time, and can result in sulfur not being available to your crop when it is needed. Talk to your local agronomist, and see is recommended and available in your area.

2011 Wisconsin Corn Soy Expo

February 7, 2011 6 comments

I attended the Wisconsin Corn Soy Expo in Wisconsin Dells last Thursday and Friday, and came away very impressed with the show, and the speakers that they presented. I attended in 2009, and don’t remember being as impressed (skipped 2010); they’ve either made improvements or this was a particularly good lineup of speakers. I missed Darren Hefty talking about soils, but showed up just in time to listen to Mark Pearson moderate a couple of panel discussions on marketing (general consensus seemed to be hang on, we’re in for a wild ride), and give a good speech himself.

Both Mark and Dr. Dave Kohl, the keynote speaker Friday morning, emphasized the global nature of agriculture right now. China is a huge factor driving demand right now, both for fertilizer for their own farmers, and for grain crops from us (and others!). They both emphasized the need for farmers to pay attention to what is happening in the global marketplace, as more and more that is what is driving the price of crop inputs, as well as commodity prices.

I wish I had learned how to take decent lecture notes (don’t ask how I got through college), as Dr. Kohl made some excellent points and statements that I wish I had wrote down. A couple did stick with me…right now, local, natural, and organic branded farm products make up about 5% of the market. In the near future, Dr. Kohl suggests they will make up 20%. That’s good news for him, as he’s involved in a local (‘local and natural, not organic’ he pointed out) creamery in Virginia. 20% is not 100%, there is plenty of room in agriculture for commodity growers, as well as specialized niche market growers. That said, I would love to be able to position myself to take advantage of that 20%. I think there’s money to be made.

Another astounding statement: 70% of US farmland will change hands by 2025. He told a funny story about speaking at the University of Iowa, and having two young women come up to him and ask what they should do with the 1,000+ acres of farmland they had just inherited; they had no idea how to handle it. Absentee landlord issues are already common in the country; it’s just going to get worse. Finally, one of his takeaway points was ‘Hear, understand, and take action!’ If we can do those three things, we’d all be in pretty good shape.

Charlie Arnot from the Center for Food Integrity was the lunchtime speaker on Friday. He’s a public relations man, and I have an innate distrust of PR flacks, as I hate hate hate spin of any type. That said, he gave a good talk on the challenges of communicating about what agriculture does to the public. The main thrust of his argument is that we spend too much time talking about science, and while science is important, most people make decisions based on emotion, not scientific fact. A sad statement about our society (and people in general), but there you go. Arnot suggested that by talking more about ethics, morals, and emotions and less about production statistics, scientifically accepted production practices, and statistics that agriculture would be more effective in regaining the trust of consumers. As he put it, ‘Consumers love farmers, they’re just not sure that what you do is considered farming’.

CFI has an ongoing campaign entitled Farmers Feed US, and they showed several videos of Wisconsin farmers talking about their operations. I’m going to embed one, Allen Arndt from Janesville, WI, as I know the Arndts. I’d encourage you to go check out the rest of the Wisconsin videos, they’re quite good.

I also attended several sessions on agronomic topics, and I may use some of that in a later blog post on high yield soybean production practices. The trade show that ran concurrent with the meeting sessions was large, and I was able to catch up with a lot of the sales reps that I work with on a regular basis. I even met one of my Twitter friends, Kevin Hoyer (aka kjh_786) for lunch on Thursday. Kevin and I have been talking via Twitter for nearly a year now, so it was nice to finally meet in person. Overall, a great conference, and I’m definitely going back again, next year.

I have one more Wisconsin Dells conference to attend next week; it will be a fairly boring agronomy-focused seminar put on by Winfield Solutions, one of the distributors that we work with. Meeting fatigue has begun to set in…I just need to make it to March (I think I have a SNAP Plus seminar in March, though. Ack). On the blog front, I know things were pretty quiet here in January. I’m aiming for at least one post a week in February, perhaps two if I include more photoblog postings in with the agriculture content. Wish me luck.

Categories: Agriculture Tags: , ,

2011 Corn Production Cost

December 16, 2010 7 comments

I’m going to talk production costs for corn in this entry. Non-ag readers, go get some coffee, then come back and pay attention. I’ll try and keep the jargon to a minimum.

Farmers have seen the price they get for corn spike pretty dramatically this year. At my elevator on August 3rd, we were paying $3.54 a bushel for November 2010 corn. This is for what we would call ‘new crop corn’, corn that would be harvested in October and November of 2010. Recently, 2011 new crop corn for November 2011 delivery has been around $4.80 a bushel. We experienced a pretty incredible rise in corn and soybean prices over the space of just four months.

Naturally, the large fertilizer companies watched this rise in commodity prices with glee. Fertilizer prices rose right along with the grain prices, with a couple of dramatic, sudden spikes over the course of the fall. At one point, my price for DAP, diammonium phosphate, jumped by $140 a ton, which was a 27% price increase. DAP has risen another 10% for spring of 2011, and indications from the wholesalers that we buy from are for prices to continue to rise over the winter.

The various forms of nitrogen I sell have experience similar price shocks. Nitrogen fertilizer is key for corn production. Without an application of nitrogen (N) fertilizer, corn yields will be 30-45% lower than with N. Even at the current high cost, investing in nitrogen fertilizer is still profitable. If you’re trying to watch your costs, check out the Corn Nitrogen Rate Calculator. It has data for several midwestern corn belt states. You can adjust the cost that you are paying for nitrogen and the price of corn in your area, and the calculator will spit out a suggested nitrogen rate that maximizes your return on investment. You can also read the very long and possibly sleep inducing Regional Corn N Rate Publication, which goes into great detail about how this calculator was developed, and also talks about how corn uses nitrogen.

The good news is that seed costs and herbicide costs are flat this year, and in some cases, maybe even a little cheaper. Every year for the past few years, I’ve used a spreadsheet from The Ohio State University (my Ohio twitter friends tell me that it is very important to put that ‘The’ in front of ‘Ohio’) to put together a break-even cost per bushel on corn production. Even in my trade area, what people are paying for rent, and what they get for average yields varies widely, so the numbers I’m about to talk about are just one scenario. The numbers for each farmer can be quite different.

Seed $ 92.00
Fertilizer $ 177.00
Herbicide $ 20.00
Drying $ 16.00
Fuel, Oil, Grease $ 20.00
Reparis $ 21.00
Crop Insurance $ 21.00
Interest $ 12.00
Machinery $ 80.00
Rent $ 180.00
Total Costs $ 639.00
Corn Price $ 4.80
Corn Yield 180
Corn Revenue $ 864.00
Direct Payment $ 25.00
Total Revenue $ 889.00

So that leaves us with a revenue $250 per acre. Nice! of A couple of points. There is no accounting for man labor in these figures and of course farmers need to buy groceries and send their kids to college; OSU suggests 5% of gross revenue for ‘management expenses’, and 3 hours per acre at $13.50 for actual labor. Using those numbers would add another $85 to the expense category, still leaving us with $165 per acre of revenue. 180 bushel yield is also a bit on the high end; I have several customers on less productive ground who are happy to average 150 across their acres. Of course, their rent is also lower. The machinery costs in this scenario are based on a 2000 acre farm; small farmers have less acres to spread their machinery costs over, and thus their costs may be a bit higher.

Actually, I could go on for a while talking about exceptions to these numbers, so I’ll stop. They are unique to each operation; if you’re farming, please do your own budgeting! Your break-even figure may vary by 50 cents or more!

That said, with a yield of 180 bushels, a corn price of around $4.00 a bushel is need to break-even. Another way to look at it is of that 180 bushels of corn, 133 of them are going to expenses.  Will corn stay close to $5 a bushel for 2011? Will it go higher? Will it go lower? Your guess is as good as mine…what I see right now is very profitable levels to make some early corn sales.

I actually didn’t realize until I ran these numbers today how favorable $4.80 corn is, even with fertilizer costs approaching the $200 per acre mark. Have I missed something? Want to poke holes in my math? Let’s talk about it in the comments.

Categories: Agriculture Tags: ,