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Acreage battle about more than prices

10/27/2011 @ 9:19am

The battle for acres in 2012 between corn and soybeans won't be entirely shaped by the economics of input costs and market outlook, says Brian Roach of Roach Ag Marketing.

"We're hearing more than just a few farmers say they are thinking of breaking the cycle of corn-on-corn that has been going for four or five years on some acres," says Roach.

The reason is that yields are not living up to expectations with continuous corn.

"For whatever reasons -- the buildup of pests, soil chemistry, weather patterns -- they're not happy with the performance of corn, and are considering a shift back to a more traditional rotation of soybeans, at least for one year. And this is not just on the marginal crop acres, either, it's on some of the best land in places like central Illinois. They're not getting the corn yields they think they should, and they may be switching some acres."

Roach says this comes on the heels of two straight years of slumping corn yields across the country -- down 4% from trend in 2010 and nearly 10% below trend in 2011.

"I think the number is around 15 bushels an acre; when yields fall that far below their expectations, it's enough to make a farmer consider doing something different to break the downward trend, such as go back to a rotational crop," he says.

It's even more important than escalating corn input costs, he thinks. "Those costs are already locked in and they're used to high inputs. It's more about being disappointed in performance, and what they can do to get back to increasing yields."

With a strong outlook for corn prices for a few more years, farmers know they need big yields to fully capitalize. If periodic crop rotation is needed to get the soil chemistry back in balance, that's what they will do, he says.

Still, Roach thinks national corn acres could grow next year, from 92 million planted in 2011 to 93.5-94 million in 2012.  Bean acres may grow, too, with the potential for $13 per bushel prices. New corn and bean acres will come from CRP acres coming out of retirement, and wheat or pasture land going to row crops.  

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