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Triple-digit decision

Agriculture.com Staff 12/19/2008 @ 8:34am

Ten years ago, paying triple digit dollars for a bag of seed corn seemed as remote as fetching $6 for a bushel of corn.

Well, both milestones were reached by 2008. In fact, the list price some of 2009s hottest triple stacks tallied over $300 per bag when first marketed last fall. Allowing for incentives like quantity, early order, and early pay discounts and recommended seeding rates, 2009 seed corn budgets for many farmers will range between $80 to $100 per acre, says Bruce Erickson, Purdue University director of cropping systems management (Prices can vary between regions).

Companies set sales programs for the next year in late summer and continue them into the current year. "We spend lots of time determining the whole price for value equation," says Bill Belzer, senior corn marketing manager for Pioneer Hi-Bred. "We do not go back and retract."

Unfortunately, gyrating corn prices complicate your seed purchase decision. It's easier to justify top-dollar seed at $6 per bushel corn than it is at $3. Still, the price you pay for seed this winter may be a distant memory if the hybrid performs well in the fall.

Suppose you're weighing planting a $200 bag of seed versus a $300 bag. Both bags will:

  • contain 80,000 seeds
  • be planted at 35,000 seeds per acre
  • plant 2.3 acres

The per acre cost for the $200 bag tallies $87 -- $43 per acre more than the $130 per acre cost of the higher-priced bag.

At harvest, though, the higher priced hybrid yields 20 bushels per acre more. At $3 per bushel corn, the extra $60 in revenue covers the $43 additional seed cost. And, returns grow if corn prices rise.

Today's triple stack hybrids with resistance to glyphosate and/or glufonsinate, European corn borer (ECB), and corn rootworm work swell where they fit. Ditto for top-notch genetics.

Put them where they don't fit, though, and you incur extra seed cost with no extra return. Dwayne Beck manages the South Dakota State University Dakota Lakes Research Farm near Pierre, South Dakota, where average rainfall tallies 18.7 inches annually.

"I don't have anything against new genetics and traits, but it's always, 'buy new and improved this,'" says Beck. "Well, especially on dryland corn in this country, 130 and 140 bushel per acre corn is about it, even in good years. If we average 100 bushels per acre long-term on poor soils, we're happy. Corn rootworm is not even an issue out there, not even in corn-on-corn."

Ten years ago, paying triple digit dollars for a bag of seed corn seemed as remote as fetching $6 for a bushel of corn.

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