For those of us who are actively farming, change is the only constant. It is interesting I am making quite a few changes the spring. Last year when I bought a tractor with RTK technology, a whole myriad of different management options suddenly became available. So I find myself this spring busily getting ready a new sprayer, new corn planter and a reconditioned no-till drill. Automatic steering on my other equipment is on the docket. Hopefully, these old bones will hold me up.
Of course the limiting factor in all of our management choices is our own potential. Anticipating the future is always difficult. As an agricultural economist I was trained about calculating the limiting factors of any farm operation. Sometimes I think that is my own energy. Other times it is simply just finding another piece of technology to jump over these limitations. We move on.
I was quite interested in the limited release in the United States of Duracade #corn seed. When I first read about it, I ignored it because I just thought it was another trait I didn’t need. However, when I learned that it was having a limited geographic release in the United States and no release at all in Canada it piqued my interest. I guess when you can’t have something you start to crave it. Our Chinese friends don’t want any part of it and that is one of the biggest reasons that Syngenta is channeling this technology. They don’t want it in their country after rejecting more than 600,000 metric tons of US corn containing the unauthorized genetically modified Syngenta corn trait, Agrisure Viptera this past year. Thankfully, the seed companies are actually reading the tealeaves.
Despite the problems with some of this technology, the Duracade example being one of them, our productivity increases especially in corn are impressive. As many of you know when I speak in public I often talk about the exponential productivity increases in corn versus soybeans. That paradigm has to be solved, but so far it’s not. As a corn producer I can expect consistently higher yields. It is ditto for the rest of the world. If they weren’t having that little dustup in Ukraine right now, we might be seeing even more corn this year.
As it is, Ukraine’s UkrAgroConsult reported this past week that up to 20% of the country’s arable land might not be planted this spring because of politics and financing. I cannot see how that can be interpreted as anything but bullish news for North American corn growers. In some ways it wouldn’t surprise me if we planted almost the same acreage in 2014 as we did in 2013.
Of course, we shall see. It is not 2008, but 2014 and there are many more corn acres worldwide. Globally, farmers took advantage of the price run-up because of the ethanol revolution and the 2012 drought. I was very interested in DTN Executive Editor Marcia Zarley Taylor’s article this past week, “Russians (and Others) Are Coming. In it she chronicles the work of Purdue University economist Michael Langemeier who was working with others around the world on measuring low cost efficient corn farms. He found that in 2012 the 5 most efficient corn farms had two from Argentina, one from the Czech Republic, one from France and an irrigated farm in Kansas.
I noticed that Ontario was not on that top five list probably because of our high land costs and northern climate. Despite that, I think the new yield goal for many in Ontario and Québec farm country is 250 and 300 bushel/acre corn. With the use of technology and better seed technology, I can see that we will be getting to that level quicker than I got to the 200 bushel per acre level back in 2004. With US corn demand currently over 13 billion bushels, if you think about it, there’s not a lot of leeway.
We’ve got enough political instability on this globe now to put the corn market completely on its ear. Needless to say, we are not there yet. The March 31st USDA report may surely change the game. The grain stocks report could shake up the old crop market and I’m fully expecting the projected corn acres to underestimate the new crop. What I do know is regardless of spring weather; almost all of us have the technology to plant this crop in record time. It’s our nature to do well. I know that I will be trying to get on Michael Langemeier’s list of great corn farms. Everybody else is trying to do the same thing. Sometimes, it’s a vicious cycle but with our technology and our passion we live to plant another day. The road to payday will surely be littered with good intentions. Managing the risk along the way will be our greatest challenge.