As harvest heads into the homestretch, most farmers start thinking ahead to plans for next year's crop. By mid-October, most crop rotations are decided; seed and fall-applied fertilizer are purchased. But something is different this year.
Many Iowa farmers just experienced one of the worst droughts in a generation, points out Steve Johnson, Iowa State University Extension farm management specialist in central Iowa. Thanks to high market prices all summer and the potential for record large crop insurance indemnity payments, most farmers will still have a profitable 2012. However, there's a drought hangover likely to impact major decisions going forward.
"Drought gets in people's minds and lingers for years," he observes. "Most farmers have memorized the drought years that impacted them and the years that impacted their fathers and grandfathers." With the memory of 2012 in mind, despite record-high corn prices this year, Johnson doesn't believe Iowa and the Corn Belt will plant as many acres of corn in 2013 as in 2012. However, there will be some farmers who will plant more corn than crop rotations suggest they should.
So what about 2013? Will weather cooperate and will we see record planted acres and a bumper crop?
Over the next decade, global demand for corn is expected to grow 1.8% per year and soybeans 2.2%, respectively. However, it would take large 2013 planted acres in both the Southern and Northern hemispheres and near perfect growing conditions with trend yields or above to get back to normal global ending stocks.
Next year's planting decisions start now. "But some factors may take those decisions out of a farmer's hands," says Johnson. "While drought in 2012 impacted corn and soybean fields alike, the appearance of brown and dying drought-damaged cornstalks and much smaller ears was recognized early on. Regret for not rotating to more soybean acres in 2012 has been a topic of discussion since midsummer."