Waterloo Cedar Falls Courier, IA
01-26-07
Farmers explore the economics of continuous corn
By MATTHEW WILDE, Courier Staff Writer
WATERLOO --- Raising more corn this year could be profitable for Northeast
Iowa farmers if yields and prices stay high.
Ethanol production is driving up the demand and price for Iowa's most plentiful crop, leaving many farmers debating if straying from their traditional corn/soybean rotation is a good idea. More than 100 farmers and agribusiness leaders attended Iowa State University's Crop Advantage Conference on
Wednesday at Hawkeye Community College to find out.
Too many variables exist --- like yield potential of certain land, individual marketing skills and input costs --- to provide a sweeping conclusion from which everyone can profit, ISU experts said. Farmers will have to plug in cost scenarios and find out if raising more corn is right for them or sticking with their traditional rotation.
A farm profitability calculator is available at ISU Extension's Web site, www.extension.iastate.edu/agdm. Look under crop costs and return, and then under profitability.
Mike Duffy, ISU farm economist, said as a general rule, corn needs to be at least
$3.50 per bushel for farmers to profit from deviating from their corn/soybean rotation. On Tuesday, cash corn was $3.61 per bushel at the East Central Iowa
Cooperative based in Hudson and corn futures on the Chicago Board of Trade topped $4.
"There's a lot of opportunities here. Different scares some people, but different also gives a chance to make a lot of money," Duffy said.
Historically, Iowa farmers like planting a field to corn one year and to soybeans the next and so on. This is done for a variety of reasons, such as breaking up insect cycles, lowering input costs and soil fertility. The corn/soybean rotation is the most prevalent in Iowa at 72 percent.
However, demand dictates more corn is needed. Farmers nationwide raised 10.5 billion bushels of corn last year, the second largest crop ever, but still it's not enough. Officials estimate demand could outstrip supply by 1 billion bushels, primarily due to the ethanol boom.

The U.S. Department of Agriculture forecasts ethanol demand will increase 34 percent this year, requiring an additional 2 billion bushels of corn. ISU Grain
Economist Bob Wisner estimates 6 million more acres of corn is needed.
Signals indicate continuous corn or a corn-corn-soybean rotation can be more profitable in years to come than the common corn/soybean rotation, but Ionia farmer Cliff Edson isn't ready to switch all his acres over to corn like some farmers in his area. He prefers a wait-and-see approach.
"I may switch 5 percent or 10 percent to more corn. I don't want to do what everyone else is doing," Edson said.
When farmers calculate rotation profitability scenarios, Duffy said farmers need to take into account that an initial yield drag is likely to occur on second-year corn. While some farmers discount that notion, he said research supports it.
This has the greatest impact on the break even prices between the rotations,
Duffy said. The soybean yield, relative to the corn yield, produces the second greatest impact. Other costs such as nitrogen, fuel and land play a role as well.
"It's difficult for me to say how high corn will go, I won't," Duffy said. "It's going to be a wild ride."
Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com
.