Jonathan Knutson, Forum Communications Co., Published May 08 2012
Corn is king this spring
His grandfather, Frank Stover, brought ears of corn with him from Indiana when he moved to the Larimore, N.D., area in 1901, and subsequent generations of the Stover family have kept raising it.
“We’ve always had it,” says 59-year-old Robert Stover.
When Bob Finken was growing up in western North Dakota, he never thought about raising corn. The crop just wasn’t viable there.
Now it is. This spring, for the first time, the 53-year-old Finken, a Douglas, N.D., farmer, will be planting corn.
“It’s time to try it,” he says.
Corn – old and familiar to some Upper Midwest farmers, new and a bit exotic to others – is shining brightly this spring. Prices are strong, and ever-improving varieties allow the crop to be raised in formerly unsuitable areas.
More farmers are growing it for the first time. Many longtime corn producers are raising more of the crop than ever before.
Typically, the gain in corn acres is coming from fields that otherwise would have been planted to wheat or soybeans. Wheat, corn and soybeans are the region’s three major crops.
A few measures of corn’s popularity in the Upper Midwest:
- Of all the additional corn acres gained nationally in the past two years, North Dakota, Minnesota and South Dakota account for roughly half.
Historically, U.S. corn production has been concentrated in the Corn Belt – Iowa, Indiana, Illinois, southern Minnesota and parts of surrounding states, including eastern South Dakota.
- North Dakota’s corn acreage has increased nearly fivefold since 1995, with corn acres in South Dakota doubling in the same period.
- Minnesota already was a major corn producer in 1995, so its percentage increase in corn acres is relatively modest: 30 percent.
Even so, Minnesota farmers have added about 2 million corn acres over the past 17 years, nearly as many as their peers in North Dakota and South Dakota.
Treat the numbers with a dash of skepticism. The 2012 acreage numbers are just projections; the number of acres ultimately planted to corn this spring could be less.
Soybean prices have strengthened recently, which could encourage farmers to plant more of that crop and less corn. And some farmers apparently couldn’t find their first, preferred variety of seed corn, which also could lead to less corn acreage, officials say.
There’s no doubt, though, that area farmers will plant a lot more corn this spring. The only question is how much more.
Why more corn?
The reason for expanded corn acreage is simple: Farmers can make more money growing it than they can with competing crops.
“It just pencils out better,” Stover says, referring to corn’s greater potential profitability.
Much of the credit goes to new and better corn varieties, which allow yields to rise.
“The trend line is dramatic,” says Lisa Richardson, executive director of the South Dakota Corn Growers Association.
The trend line, or general statistical pattern over time, shows that average U.S. corn yields have risen from 127 bushels per acre in 1995 to an estimated 160 bushels per acre this year. Yields don’t go up every year – weather inevitably has an impact – but the trend line is higher.
Also contributing to the profitability in corn is farmers’ growing use of technological tools such as GPS.
“Corn fits in well with technology,” says John Mages, a Belgrade, Minn., farmer.
Corn provides sufficient return to justify the cost of new, expensive technology, which may not be the case with other crops.
Other factors are at play, too, in rising corn acres:
- The United States is the world’s leading corn producer and exporter, and export demand remains strong, says Todd Davis, senior economist with the American Farm Bureau Federation.
- Seeing potential higher profitability, more young farmers are turning to the crop in parts of the region where it traditionally wasn’t grown.
“A lot of young farmers, when they join the family farming operation full time, want to grow corn,” says Bart Schott, chairman of the National Corn Growers Association and a Kulm, N.D., farmer.
- More farmers are comfortable growing corn on corn, or planting corn on the same field two or more years in a row. Traditionally, farmers rotate crops on a field from year to year to combat disease and insects.
Keith Alverson, who grows corn and soybeans in Chester, S.D., in the eastern part of the state, says his family farming operation plans to plant corn on 80 percent of it acres this spring. Some of the fields destined for corn this spring were planted to corn last year, too.
- Corn thrives on heat and moisture, and much of the northern Great Plains has been unusually wet since 1993.
As Schott notes, the North Dakota Corn Growers Association celebrated its 25th anniversary earlier this year. So corn is hardly new to the state. However, the crop was grown primarily in the southeast part of the state, where the climate was conductive to the crop.
But wetter conditions and better varieties have caused crop production in the state to expand north and west. Today, there’s growing interest in corn in northwestern North Dakota.
“We’re on the fringes here. But it’s coming,” says John Woodbury, location manager in Ross, N.D., for Dakota Quality Grain Cooperative, which also has North Dakota locations in Parshall, New Town, Palermo and Stanley.
Officials in Minnesota and South Dakota also say interest in corn is growing in areas where traditionally it hasn’t been grown.
Here’s an example of why more farmers are turning to corn, using statistics from the North Dakota State University Extension Service’s 2012 Projected Crop Budget. The numbers are for east-central North Dakota counties of Eddy, Foster, Griggs, Stutsman and Wells.
Corn is projected to bring a gross return of $523.80 per acre, Total costs come to $412.21 per acre, leaving a profit of $111.59 per acre.
In contrast, spring wheat is projected to bring a gross return of $328.58 per acre. Total costs come to $273.07 per acre, leaving a profit of $55.62 per acre – roughly twice as much as the projected per-acre profit for wheat.
Corn acre projections for individual counties this year aren’t available.
But farmers in east-central North Dakota clearly are attracted by corn’s profit potential.
Last year, farmers in Wells County planted 49,100 acres of corn, up from 6,600 acres in 1995. Average annual yields have fluctuated from year to year, but there’s a strong upward trend. Average yields per acre rose from 64.1 bushels per acre in 1995 to 104.8 bushels per acre in 2011, according to the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.
Last year, Wells County produced 4.9 million bushels of corn, roughly 20 times more than the 243,700 bushels in 1995.
Farmers in Wells County almost certainly will plant more corn this year than a year ago, says Lindsay Maddock, NDSU extension agent.
The ethanol factor
By all accounts, ethanol has contributed mightily to corn’s increasing popularity with farmers.
Nearly 40 percent of the U.S. corn crop this year is projected to be used for ethanol and a byproduct, dried distiller’s grains. The latter is fed to livestock.
The federal renewable fuels standard requires increasing amounts of ethanol and biodiesel to be blended into the U.S. fuel supply. Because of the standard, ethanol-based biofuel consumption has been rising for years, and is projected to reach 13.2 billion gallons this year, according to information from the American Coalition for Ethanol.
However, the amount of ethanol-based biofuel will be capped at 15 billion gallons in 2015.
That will cause corn use in ethanol to plateau temporarily before beginning to rise again, Rick Tolman, chief executive of the National Corn Growers Association, predicted earlier this winter.
He also predicted that average U.S. corn yields will reach 300 bushels per acre by 2030. As yields rise, more corn will be available for ethanol use, he said.
Some area farmers, particularly older ones who remember long stretches of dry weather, question what would happen to corn acres if the area turns dry again.
Schott says new drought-resistant corn varieties address that concern.
“I call them the moisture misers,” he says of drought-resistant varieties.
Seed giant Monsanto plans large-scale tests of genetically modified drought-resistant corn this summer from Texas to South Dakota. Other companies have developed drought-resistant corn through conventional and molecular breeding, but Monsanto says it’s the first to petition the federal government for a genetically modified, drought-resistant trait.
USDA decided late last year not to regulate the drought-resistant corn, essentially clearing the way for commercial release, according to the Associated Press.
Schott, who planted his first corn crop in 1977, says the long-term outlook for corn is bright and that the Upper Midwest will continue to play an increasingly important role in U.S. corn production.
“It’s here, and it’s only going to get bigger,” he says.
Jonathan Knutson writes for the Agweek
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