Where's the problem?
Writing a farm business column is normally simple. Write a catchy lead, define a problem, and list potential solutions.
As I write this, though, cash corn has rocketed past $4 per bushel in many locations. Ditto for cash soybeans, which are nipping at the $11-per-bushel barrier. Wheat? Cash prices for this former doormat have whizzed past $10 per bushel.
So, is there a problem here?
Well, yes. "Everyone talks about the implications of higher prices for corn," says Mike Boehlje, Purdue University agricultural economist. "Does it guarantee higher incomes? Not true."
Call it that giant sucking sound going out of your pocketbook that's paying for the inputs. Costs for land, seed, fertilizer, and chemicals are moving in lockstep with skyrocketing crop prices. This threatens to snuff out price windfalls.
This new environment magnifies production decisions you make. With corn, picking the right or wrong hybrid can swing yields by 40 to 50 bushels per acre, says Roger Elmore, Iowa State University (ISU) Extension agronomist.
Making the right decision isn't easy. Last year's winning hybrid doesn't always repeat. That's why it's more important than ever to spread risk by planting a mix of hybrids.
Wayne Blunier, Roanoke, Illinois, recalls a lesson he learned early in his farming career. He was tempted to plant his farm's top yielder in 1981 and 1982 across all his corn acres in 1983. He didn't, choosing instead to plant a package of several corn hybrids across his farm.
That turned out to be a wise decision. "Had I planted the entire farm to it in 1983, it would have been a disaster," he says. "That hybrid absolutely crashed during that drought year. It was hot during pollination, and since the tassels didn't match up with the silks, it couldn't pollinate."
Make sure the hybrids you pick for your planting package indeed differ. Check the labels for the original variety. Read product descriptions. Spread relative maturities. Steps like these will help ensure you are diversifying your hybrid package against weather extremes.
This logic extends to selecting soybean varieties.
"If you want to be sure varieties truly are different, select them from different maturity groups," says Palle Pedersen, ISU Extension agronomist. "Beyond that, you can also look at flower color. The most important thing in variety selection is to pick varieties from replicated trials and several locations."
Speaking of soybeans, it's interesting to note this crop was on the ropes several years ago. The breaking point was November 2004, when researchers discovered Asian soybean rust in a Louisiana field. This discovery, when combined with other pest pressure and corn's ethanol-induced rise, prompted many farmers to move soybeans to the back burner.
Now, soybeans are back. The crop's price run-up and corn's spiraling production costs spell a snap back for the "miracle" crop.
Productions challenges still exist. Bean leaf beetles and soybean aphids will likely keep foliar insecticide applicators busy (and your checkbook active) this summer. Ditto for maladies like soybean cyst nematode and iron chlorosis.