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Demand, Technology Optimistic Points for Corn and Soybeans

Gil Gullickson Updated: 08/19/2014 @ 3:27pm Crops Technology Editor for Successful Farming magazine/Agriculture.com

If you’re down in the mouth about struggling crop prices, chin up. There’s still plenty to look forward to, says Mike Vande Logt, Winfield’s executive vice president and chief operating officer.

Vande Logt kicked off this week’s Winfield Ag Tech Summit in Las Vegas, Nevada, by telling about an executive he knows who heads Nestlé’s dairy business. Right now, the executive said a top-selling product in developing countries is a 10-cent packet of nonfat dry milk. That’s because when people move from lower to middle economic classes, one of the first things they buy is milk for their children.

So what makes this milk possible? “Corn and soybeans,” Vande Logt says.

Even with corn and soybean prices tanking this summer, it’s demand like this that bodes well for the future of these crops, he adds. Demand helped corn escape the $2-per-bushel price plateau that occurred from the late 1980s into the mid-2000s.

From 1989 to 2000, an acre of corn was worth around $225 per acre, notes Vande Logt. That skyrocketed to around $975 per acre in 2009.

“That’s a $750 difference,” he says.

So who got the money?

Well, landlords got some. So did farmers. Ditto for fertilizer and the “Big 6” chemical companies (Monsanto, Syngenta, Bayer, DuPont, BASF, and Dow.) So did machinery and pickup companies.

Seed was another beneficiary. Since 2009, seed firms have plowed a greater share of revenues into research and development (R and D). These investments will quickly bear fruit during the next five years or so, says Vande Logt. Molecular breeding in particular will speed positive genetic changes.

“Farmers can already see this, when they hit 275- to 300-bushel (per acre) spots in their field while combining,” he says.

To realize this yield potential, though, they must pair top-notch genetics with the right inputs. Playing a crucial role in helping farmers do this will be agricultural sales and technical personnel. Vande Logt cited a Purdue University study of what makes a top agricultural salesman. Honesty and technical competence were the top attributes.

“In other words, they want technology advice from people they trust,” he says.

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