Some Say 'No' To Corn Switch

Not everyone convinced continuous corn best for them.

Published on: Dec 5, 2006

Corn at $3.50 per bushel now and visions of even higher prices ahead have some farmers thinking about a major shift out of their typical 50/50 corn/soybean rotation to more acres of corn next year. One large farm operation in north-central Indiana is contemplating going all the way- 100% corn next year, hoping to cash in on higher corn prices.

That might make sense if (a) you think high corn prices are here to stay; (b) you're willing to deal with the agronomic downsides of corn after corn; (c) you think soybeans won't keep pace price-wise, plus might be plagued by more production issues, including Asian soybean rust in the near future; (d) you have excess storage or are willing to invest in storage facilities so you can meet delivery challenges of supplying corn to ethanol plants; (e) you like buying, fixing up and driving trucks, since each acre of corn means about three times the volume of grain to handle, compared to each acre of soybeans; and (f) you can figure out how to spread corn harvest over the entire fall, so you can get an early start and get the crop harvested in a timely manner with the help available to you.

If you're tempted by high corn prices and haven't thought through all the implications, maybe you should before you lock in enough seed corn to plant most of the farm in corn. Higher inputs for continuous corn, possible lower yield, storage issues and harvest logistics have some farmers thinking the best option for next season is to stay where they are now- with a healthy 50-50 corn/soybean rotation.

"I'm not ready to jump into corn after corn," one south-central Indiana farmer says. "If enough other people go to corn, soybean price might be better than some think. The price for fall '07 delivery for soybeans isn't too bad right now. I don't have the extra storage room to go to continuous corn, and I'm not sure I'm ready to invest in bin space to do it."

A north-central Indiana farmer is known for farming on paper before his tractor moves out of the barnlot. He's run the numbers for his farm for '07. Even factoring in extra input costs for corn after corn, it still looks attractive for next season. In fact he figures he would have to get about $8 per bushel for his soybeans to equal what he could net if he switched to more corn next year. As of now getting that kind of soybean price seems iffy. At least it's not possible to lock in that kind of price using traditional marketing options right now.

So he's switching, right? No, he says he's going to stay put with his near 50/50 -corn/soybean rotation. He's not sure its' worth messing up his system that works well agronomically, at least not until it's clearer that higher corn prices are going to stay around more than one year. He believes the demand for ethanol is real, but it's still an uncertain business since it's affected by politics and world developments.

Instead he's gambling, like the other farmer we talked to, that other folks will shift to corn - enough so that soybeans will have a favorable supply-demand scenario so that prices for soybeans rise for next fall's crop.

And besides, he feels ethanol is getting all the coverage while soy biodiesel is being ignored in Indiana. With the world's largest biodiesel plant under construction near Claypool, he feels the demand for soybeans in Indiana may be stronger than many allow credit for. At any rate, it's a risk he's ready to take to keep his crop rotation intact.