Growers Make Their Bets On Crop Mixes

There are some major shifts in traditional commodity crops in the Southeast.

Published on: Mar 7, 2013

Carolina-Virginia growers are coming off some record yields in 2012 and there are good market prices on a variety of crops. But when a grower has to place bets on which crops are the best for his operation, his bet has to be based not only on the situation today but on what will bring the best prices at harvest time. In addition to that, of course, he must try to choose which crops will best help him avoid weather disasters along the way. This is not an easy game to gamble on.

Generally speaking, this year seems to trending away from cotton in the Carolina-Virginia region, says NCSU cotton specialist Keith Edmisten. "But how much less cotton growers will plant is still in question," he says.

BETS ON OR OFF? Carolina-Virginia farmers have a number of crops they can choose to grow this year that have a good potential to be profitable. The question is which way will the markets turn?
BETS ON OR OFF? Carolina-Virginia farmers have a number of crops they can choose to grow this year that have a good potential to be profitable. The question is which way will the markets turn?

Even though the price of cotton is down, relatively speaking, and corn, wheat and bean prices are up, there are times when the "up" prices trend downward and vice versa. That was often the case in February as soybean prices hiccupped, further contributing to farmers' hesitance.

"A lot of the farmers I've talked to haven't really decided what their mix is going to be but, in general, they are going to be down on cotton and up on soybeans," Edmisten said. "A couple of growers have told me they probably won't decide until sometime in April, probably, especially if the prices keep diverging like they are now."

Nick Piggott, N.C. State University economist, noted during the N.C. Agricultural Development Forum in early February, that grain sorghum is a new exciting crop in the region that got off to a great start last year after contract hog producers like Murphy-Brown LLC let it be known they would buy and stand behind the market.

~~~PAGE_BREAK_HERE~~~"I think the biggest focus in North Carolina is a really strong effort to increase grain production profitably," said Piggott, "that being to provide more grain to try to close the deficit we have. The livestock industry has made a commitment to create a new market for things like grain sorghum. We're seeing an increase in basis for them wanting to buy more grain locally. The whole effort is a kind of self-help effort for the state and the Southeast to rely less on the grain coming from the Midwest and to produce more locally. I think the opportunity is for our row crop farmers to transition away from some of the more traditional crops such as cotton and peanuts and more into corn, wheat, grain sorghum and soybeans."

Peanut growers may be open to change. Peanuts set a record for yield in North Carolina in 2012 but contract prices offered have been frustrating for some.

It still remains to be seen what tobacco growers will do. A great year last year left them optimistic -- but there's a lot of competition for acres in the market place and it remains to be seen if the tobacco contract prices offered have been convincing.

Edmisten still believes cotton will continue to have a place in North Carolina fields.

"I don't know that we'll get back to a million acres anytime soon, or anywhere close to where we were at a few years ago," he says, "but I still think for drought-stressed soils cotton is a good choice. You know, we don't have the options like they do in the Mid-South or we'd be dropping cotton right now, more like they're doing in the Mid-South, in terms of growing corn and higher yielding soybeans."

He does leave open the possibility of losing cotton acres, wholesale, under particular circumstances. For example, he says, if growers were to lose another control option for resistant Palmer amaranth, it could be a game changer.

And there are many other unknowns. "What will happen with U.S. energy policy? …Will ethanol be less of a priority to the nation?"

Any changes like these could shuffle the crop mix in unknown ways, he says.