ND Corn Acres On Fast Track

A few weeks ago I wrote about corn being one of the most profitable crops for northwest North Dakota according to the recently released 2013 crop budget of North Dakota State University. Then Rick Bieber of Trail City, South Dakota spoke during the Wheat Show explaining how corn and the crops worked so well in his no-till cropping system. He gave corn a lot of credit for his farm’s profitability. Also, about this time, I received research reports of Williston and Minot and found two-year dryland yields to average 70 and 113 bushels per acre respectively. Last year, the dryland grain yields at Williston ranged from 75 to 100 bushels per acre.

Corn grain production is growing very fast in North Dakota. Last year the area planted to corn was 3.6 million acres, of which 3.39 million acres were harvested. This is the largest area ever planted to corn and up by more than 1.3 million acres from last year. The average yield for the state in 2012 was 120 bushels per acre, up from the yield of 105 bushels per acre recording in 2011.

The 2012 growing season started out dry, which allowed for early planting, with more than 50 percent of the average planted by May 6. Conditions tended to be dry after planting, so some emergence issues were noted in some regions of the state. Growing degree day accumulations were above normal so the crop finished early, with nearly all the corn being harvested before the end of October. As we know very well, conditions were very dry during July and August, causing drought stress, which resulted in yields below the trend. However, yields were better than expected because the drought was not as damaging in North Dakota as in other regions of the United States. It is likely some of the corn was planted on ground too wet for any crop the previous year.

Results of all the 2012 yield trials conducted by NDSU research is available in publication A-793-12 “North Dakota Corn Hybrid Trail Results” available as a link on our website http://www.ag.ndsu.edu/williamscountyextension.

The driving force behind the sudden surge of corn acres in North Dakota is profit and the ability to grow corn. Research continues to develop corn varieties which have the ability to mature during our short growing season and low rainfall conditions. The NDSU budget used an 80 bushel yield and $6 per bushel to calculate gross revenue. Both yield and price can change. For instance, last week cash corn was trading at 6.50 to 7.00 across North Dakota. Exactly two years ago the market was paying North Dakota farmers near 6.00.

Early projections by people “in-the-know” indicate U.S. farmers will dedicate a record number of acres to corn in 2013 – 99.3 million. Although the U.S. drought has eased in much of the major U.S. corn producing areas, there still is a bit of uneasiness about the success of the 2013 crop.

There are a number of factors which are or can play into this year’s corn market. The high prices of recent times have driven farmers of other countries to learn how to grow corn. While they may not have the lowest costs of production, their crop is the lowest priced in the world market. Thus, U.S. exports of corn have dwindled to the lowest level since the 1971-72 crop year. USDA recently lowered its projection for corn exports by 50 million bushels to 900 million.

USDA has raised 2012-13 world corn productions to approximately 940 million tons, with increases in Brazil, Mexico, India and Ukraine while it reduced Argentina’s expected production by 1.1 million tons to 29.7 million due to persistent dryness that is threatening yield prospects, particularly for late planted.

Jerry Gulke, President of the Gulke Group, recently suggested a 2013 corn market as low as $3.40 per bushel if the national corn yield average reaches 160 bushels per acre and a high of $7.30 if the national corn yield averages 125 bushels per acre. These numbers certainly indicate there is risk in raising corn. A price drop of $2 from the $6 used by NDSU would wipe out the significant return to labor and management listed in the NDSU budget. However, because corn has multiple uses and is used by people around the world, it seems like the corn market should have more high-side stability than many other crops grown in the area.