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 Across the country corn
acres have been on the decline over the last few years, with soybean
acres being on the increase at approximately the same rate, an
indication that the era of corn-on-corn production is fading and
farmers are once again looking at the organic value of crop
rotation. Additionally, soybean prices have been high over the last
two years, enough so that the lower bushel per acre crop brings in
more dollars per acre.
In 2016 across the 48 states, approximately 95 million acres of
farmland were planted to corn.
In 2017 corn and soybean crops were equal at 90 M acres planted.
In 2018 corn numbers dropped to 89.1 M acres planted, just one
percent less than in 2017, and soybean acres at 89.6 M acres planted
were up one percent from 2017.
Three big producing states reported that corn acres would decrease
by 300,000 or more. Those states were Kansas, Minnesota and North
Dakota.
However a few states indicated that corn acres would increase in
2018. Among those states were Nevada, Oregon and Ohio.
In 2017 a research article written by Michael D. Helman with the
University of Missouri Food and Agricultural Research Institute
indicated that within the state of Nevada a downward trend in
markets for beef cattle, dairy products as well as wool was going to
be an ongoing issue for the state agricultural producers over the
next few years. While the report referred to the opportunity for
gain to be moderate, other factors were entering into the equation,
such as the impact weather and drought was having on alfalfa crops
and the need for an increase in purchased feed stocks for all
livestock producers.
In 2012, 40 percent of the state agriculture gross receipts came
from the sale of beef. Dairy production also played a large role in
the state’s overall agricultural economics. Hay was listed as the
largest crop, but was tied back directly to the production of
livestock, and not so much for export nationally or internationally.
With the livestock values declining and the state suffering drought
conditions in recent years, it stands to reason that more range fed
cattle are being fed grains to supplement their diet. Therefore, the
increase in corn production in the state is not going to have a
significant impact on grain stores in 2018.
While increases were reported by the Corn Growers Association for
the state of Oregon, that state doesn’t even list corn in its top 10
agricultural products.
Oregon is noted for its production of cattle. Cattle and calves is
listed as their number two in the top ten products list. According
to Farm Flavor, Oregon producers market $701 million in cattle and
calve revenues annually.
Therefore, it seems that the impact that an increase in production
of corn in that state would be insignificant in the world markets.
While the National Corn Growers Association reported in March that
Ohio farms would plant more acres to corn in 2018, a report by AgWeb
in August of this year does not support that statement.
According to a report published by the College of Food, Agriculture,
and Environmental sciences at the Ohio State University, corn acres
have been on decline since 2013, while soybean acres have increased.
This same report says that soybean acres will exceed corn in the
2019 production year.
On the flip side, Ohio farmers will reach a new high in corn yields
this year according to a second article published in August by AgWeb.
In Illinois, according to Grainnet.com farmers planted 200,000 fewer
acres to corn in 2018 compared to 2017. At the same time, inputs for
the remaining acres increased by $8 per acre. The article published
on July 3rd of this year predicts that this will be the fifth
straight year of a drop in farm income in the state of Illinois.
However, the bright spot in this figure is that according to an
article published in FarmdocDaily, Illinois farmers will see higher
yields on fewer acres and their net losses on the higher production
acres, such as those found in Logan County, will actually be less
than in the past years.
Farmdoc estimates that the net return per acre in 2018 will be minus
$12 based on a yield of 215 bushels per acre. This is compared to
losses of $57 per acre last year and a projected net loss of $44 per
acre next year.
Now, another consideration is how close will Logan County farmers
come to that estimated yield average? If per chance, those yields
could come in at an average of 220 bushels per acre, local farmers
could actually see a small profit in this year’s corn crop.
On the flip side of this coin,
the Logan County Farm Bureau Young Leaders earlier this year
conducted their countywide yield estimate tests and they determined
that Logan County on the average will have yields in the 207 bushel
range, meaning that the Farmdoc estimate of profitability could be
inaccurate locally.
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At the same time, the FBYL
took into consideration that they were estimating the yield based on
lighter weight corn that would equate to 85,000 kernels per bushel.
In 2017 corn came in heavier with 78,800 kernels per bushel. If
kernel weight should be heavier than estimated the bushels per acre
will increase. The FBYL stated that if the kernel count in 2018
would happen to duplicate that of 2017, the bushels per acre this
year could increase to 223 on the average. This would allow for that
small margin of profit mentioned earlier.
So what does all this mean for
Logan County farmers? Not a whole lot. Increased corn acres in
western states is not going to have an impact on grain prices.
Decreased corn acres throughout the other states in the union are
going to be more important for the future of the corn markets
because it may impact grain in stock.
With the advances in seed corn, higher yields are expected, which
could equate to break even or increased bushels on the whole at
harvest time across the country in spite of the decrease in acres
planted. If weather impacts harvest or yields and causes a decrease
in anticipated yields, then that could impact the bushels of corn
stored in 2018. According to the NCGA, 2017 stores totaled 8.89
billion bushels, only up three percent from March of 2017. If corn
in storage does not increase and if trade agreements are reached in
2019, that could equate to a higher price per bushel at the
elevator.
Farm doc is also projecting that corn prices in 2019 will be
slightly higher on the average moving from $3.70 per bushel in 2018
to $3.80 in 2019. Cash prices at the elevator do not support that
claim as of October 12th,2018, when the average corn price was
$3.27. However, this is harvest time, and with the trade agreements
in limbo, prices are lower than they should be and lower than they
could be toward the first of the year.
So, where is the silver lining in all these figures? It’s really
hard to say. Once again there are as many “what if scenarios” in
this basket as there are kernels on an ear of corn. If the trade
agreements are worked out and China is open to corn imports from the
U.S. we could see an increase in volume sold, a decrease in bushels
in stock and an increase in price. China is working to require
higher rates of ethanol in all their gasoline products so that could
mean more raw product purchased in the coming years.
Silver linings are often as hard to find as pots of gold at the end
of rainbows. But Logan County's silver lining is its continued
outstanding yields, year after year. The bushels brought in from the
field are higher in spite of fewer acres planted, input costs
continue to go down, and looking at new markets for the consumption
of corn the price at the elevator may indeed rise rather than fall.
A blessing to Logan County farmers continues to be in the
development of alternative energy projects, wind and solar,
replacing production income while taking away tillable acres. With
reduced acreage available, and increased yields per acre, coupled
with revenues gained from alternative energy payments to the farmer
for land use, Logan County farmers could see stable farm income from
crops with the bonus of income from alternative land use.
Changing farm practices with the reduced acreage needed to produce
the same total bushels, there is room for greater diversification on
the farm. Whether it be an increase in soybean production, returning
to crop rotation or exploring alternative crops, farmers in this
county may find that they can accomplish more on fewer acres, thus
increasing their odds for profitable years in the future.
Sources:
USDA: FARMERS PLANTING FEWER CORN ACRES IN
2018
MARCH 2018
Oregon’s Top 10 Agricultural Products
2017 Nevada Agriculatural Outlook
Ohio corn acreage continues to decline
Crop Tour Shows Dominating Yields in Ohio,
South Dakota
Illinois Farmers Invested Nearly $4 Billion
Into 2018 Corn Crop
Corn and Soybean Budgets for 2018 and 2019:
Low Returns Ahead
Gary Schnitkey
Farm Bureau Young Leaders estimates 2018 corn
yields at 207 bushel/acre
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