American Farm, MD
04-10-07
Profitability depends on corn yields, prices exceeding soybeans
(Editor’s Note: This is the last of a three-part series by DTN agronomist Dr.
Daniel Davidson looking at how the farmers have overcome the challenge of
continuous corn to make it a profitable endeavor.)
By DANIEL DAVIDSON
DTN Agronomist
OMAHA — So how much more will it really cost to grow continuous corn as
compared to corn after soybeans?
The profitability of a continuous corn system largely depends on corn yields and
prices far exceeding those of soybeans.
This is the exact situation growers are facing in 2007, but they still need to
consider the long-term economics, especially tillage costs, before making a final
decision on their rotation.
“Corn requires commercial nitrogen. In addition, rootworms must be managed in
situations with more than one year of corn,” said Mike Duffy, agricultural
economist at Iowa State University. “Depending on your situation, there may
be weed management and tillage considerations as well.”
More corn also means the potential for more drying, harvesting, storage and
handling costs as more bushels are taken out of the field.
“Nitrogen prices, relative corn and soybean prices, level of nitrogen used and so
forth stand to impact the breakeven price when comparing rotations,” Duffy said.
“But the yield difference is the single biggest factor in determining the optimum
rotation.”
With corn out-yielding soybeans four to one, a yield loss of 10 percent seems
insignificant, especially considering the futures price for corn is more than $4 per
bushel, while soybeans are priced at $8 per bushel.
Remember the basis for soybeans is easily double that of corn, so the cash price
is even less than the futures price reflects.
Admittedly, growing continuous corn can cost more than a corn-soybean rotation,
but on a per-acre basis, there isn’t much difference in production costs.
If you make a list of the practices growers use for both conventional and
continuous corn, you’ll find that both systems require much of the same
technology and tillage practices — early planting, high seed rate, elite genetics
with a good disease defensive package and quick dry down, seed treatments,
double- and triple-stacked Bt hybrids and herbicide tolerance.
If you think about it, the only increase in cost will be from extra tillage and extra
nitrogen and perhaps fungicide. It may cost you an extra $12 to $15 per acre in
nitrogen and another $10 to $20 per acre in tillage costs. But with corn’s high
yield potential and high futures price, economics dictate that growing continuous
corn is more profitable than soybeans.
In most cases, a little yield drag will not be a deterrent.
Most farmers can do the economics in their head and the promises of $700-peracre gross revenue for 200-bushel corn at $3.50 cash compared to $400 per
acre for 55-bushel soybeans at $7.50 cash is enough to convince almost any
farmer continuous corn is worth the risk.
To conclude and to quickly summarize the information provided in this three-part
series, at a recent Pioneer Hi-Bred agronomy media event, Paul Gaspar,
agronomy research scientist at Pioneer, gave a group of reporters, including me,
a ‘to do list’ that corn growers need to consider before jumping to continuous
corn.
• Expect 10-percent-yield reduction compared to corn on beans. I believe this is
overemphasized, and is something that can be easily overcome.• Pick fields
carefully. Select highly productive and well-drained fields.• Use tillage. Cut and
bury stalks if possible. Create an ideal seedbed.• Wait for soils to warm. This not
going to be your first field planted.• Use residue managers on your planter. Clear
an 8- to 12-inch zone over the seed.
• Use insecticide seed treatments to control secondary insect pests.
• Use starter fertilizer.
• Have adequate nitrogen. That means adding 30 to 50 pounds per acre.
• Select hybrids with a solid stress emergence score and with good rating for high
residue management, and with good disease scores.
• Manage corn rootworm using either Bt or insecticides.
• Plan for later harvest and select a hybrid that will stay standing in the field until
it can be harvested.
Gaspar’s tips are appropriate and will improve your chances of success.
But when I look at this list, I also recognize that today’s top corn growers are
already doing most of these same things in their corn-soybean rotation because
they want to reach their highest yield potential.
Growing continuous corn can be a challenge and there are some risks.
It is important to note these risks vary depending on where you farm and the
environmental conditions you contend with.
Because many of you are already using most of the best practices to get high
corn yields and protect your yield potential, moving to continuous corn production
will not be big step for you.
If you are a good crop manager and pay attention to Gaspar’s list, you too can be
successful.
If you ask farmers who grow continuous corn about these issues, they wonder
what the commotion is all about.
In a year or two you might be saying the same thing.
***