Bright Future For Corn, But Does Danger Lurk Around Every Corner?

Inside Dakota Ag

At the S.D. corn convention, speakers say there's plenty of profit potential in corn -- but many political and regulatory challenges are coming.

Published on: January 18, 2014

“I think the future is pretty bright for new crop corn… I think we have a lot of [profit] potential,” said Mark Pearson, host of the Market to Market TV show, at the South Dakota Corn Grower Association annual meeting.

He said he expects corn to stay around $4 per bushel in 2014.

With more aggressive marketing than was required in the past two years, farmers will be able make money on corn, he said.

“Are we going back to $2.50, $1.25 [per bushel] corn? Are we going back to having to buy junk equipment? Is it going to be the end of the world in ag? No, we are going to be a stable industry with a lot of growth prospects (due to world population and middle class growth). We’re adding a new Sioux Falls every day to the world population,” he said.

Other hot topics at the SDCGA convention:

Conservation compliance & crop insurance. Crop insurance subsidies will likely be next big target for anti-ag groups, said Bruce Knight, former chief of the USDA NRCS and now president of Strategic Conservation Solutions.

Ag's best change of saving crop insurance is to build a coalition with conservation and wildlife groups by agreeing to like conservation compliance with eligibility for crop insurance.

“We will have armed ourselves to defend crop insurance, “ he said.

Farmers who have gotten out of farm program and drained wetlands will likely be allowed a grace period to restore wetlands they drained or to mitigate those wetlands, he said.

Tiling and nitrates. Nitrate discharges from tile lines will likely come under attack from anti-ag and environmental groups, predicted Warren Formo, executive director, Minnesota Water Resource Center. But farmers can reduce nitrate discharges by installing filters and by changing when and how they apply manure. The key is knowing how much nitrate is being discharged from tile lines. The group will be offering farmers confidential testing at farm shows and other events this summer and providing some advice on what the numbers mean.

There was some good news from Formo about tiling in the Red River Valley. Tiling actually reduces phosphorus runoff that environmentalists and the Manitoba government says is polluting Lake Winnipeg. P is carried is surface runoff, not tile discharges.  Tiling reduces P runoff because it will reduce surface runoff.

Hot words for EPA. SDGA urged farmers to submit comments to the EPA on its proposal to scale back the Renewable Fuel Standard The hottest lines in the SDGA’s form letter to EPA were: “Altering this successful policy {the RFS] at a time like this is absolutely shameful. How can you reasonably adjust the numbers following a record corn harvest that your policy helped dictate? You are literally plugging the rug from underneath our feet.” Farmers will likely be equally upset about clean water regulations that may be coming from the EPA. Don Parrish, director of regulatory relations for the American Farm Bureau Association, said he fears EPA will try to regulate water quality in field ditches – which may affect what kind of pesticides farmers may apply and what kind of tillage they may do. “I may sound alarmist, but I am alarmed,” he says.