Demand for ethanol has led to the planting of the nation's largest corn crop ever. Corn prices are high, but so are costs
How big are those 600,000 additional acres? More than half of the Boundary Waters Canoe Area.
Minnesota's total crop of shelled corn, the kind used for animal feed and ethanol, will fill the Metrodome. Twenty-six times.
Call it the ethanol effect.
"We're not planting more corn because corn is cool," said Ed Usset, an economist with the University of Minnesota Extension Service. "The economics are there. The ethanol craze is driving this."
Nationally, farmers are planting 15 percent more corn than a year ago, a total of 90.5 million acres, the most since the end of World War II.
Last year, the U.S. corn crop was valued at a record $33.8 billion. Corn climbed to a 10-year high of $4.50 a bushel on Feb. 26. The price has fallen since then amid concerns about overplanting, with corn for September delivery at $3.87 a bushel at Thursday's close on the Chicago Board of Trade.
The economics of farming mean that not everyone will be rolling in cash after the harvest. Farmers face higher fuel costs and higher feed costs for their livestock. Landowners have raised rents on farmland. And the higher cost of all that corn means ethanol plants may not be as profitable as in years past.
Some of this year's increase will mean fewer acres of other crops, including soybeans, wheat, barley, dry beans, sugar beets and flaxseed. Some crops still will be increased, including oats, sunflower, canola and hay plantings, according to the U.S. Department of Agriculture (USDA).
Rain, rain go away
Despite farmers' corn intentions, the weather has reminded everyone that nothing in farming comes easy. A cold April and early rains have slowed farmers in southern Minnesota, and especially in Iowa, the heart of the nation's corn crop, where farmers had just 14 percent of the crop in the ground by Sunday, compared with 58 percent in the ground by the same time last year, according to the U.S. Department of Agriculture.
Farmers in Minnesota, meanwhile, had 28 percent of the crop planted by last Sunday, less than the 43 percent planted by the same time last year.
"We've been pretty wet," said Keith Haugen, manager of United Agriproducts in Harmony, Minn. "There's not a lot of rain but just enough to keep us out of the fields."
Those delays will become more important with each passing day: The later they plant, the less corn farmers can expect.
"The next 10 days are critical," said Brian Buhr, an economist at the University of Minnesota. From now through about May 21, yields historically decline by about one-half bushel per acre for every one day later, according to University of Minnesota researchers. If the corn isn't planted by the end of next week, some farmers may begin planting other crops where they had intended to plant corn.
Trying not to ruin it
Drive the ribbon of paved road that runs through the fields in New Market Township near Albert Zweber's Scott County farm and you might think the whole world has gone to corn: Black fields freshly seeded fill the landscape, some inching up to the road's edge.
"We're dry here, that I'll tell you right now," said Zweber, taking a break between planting runs on Thursday morning. He said he'll plant as much corn this year as last, hoping for an inch of rain a week.
A farmer who lives nearby said he also plans to stick to his usual acreage.
"I didn't change a thing," said Charles Friedges, a third generation corn and dairy farmer near Elko New Market. He had purchased seeds early and stuck to a plan that called for planting 320 acres of corn. "If the past dictates the future, a lot of times we ruin it," he said.
Farmers around Worthington were planting a lot more corn, according to Liz Stahl, a crops educator with the Extension Service.
The region usually sees a 50-50 split between corn and soybean acreage, she said. This year: "We might get two-thirds to one-third."
Still, farmers, many of whom rent land, are also getting bitten by the high prices. "Now [landowners] are saying. 'They've got this high price of corn, so let's crank up that land rent,' " Stahl said.
There have been reports of farmland selling for $4,000 to $4,200 an acre, a huge increase.
"Even with $4 corn, I don't know how they pencil that out," Stahl said.
Many farmers have become sensitive to the perception that they're cashing in while grocery prices rise.
"I think part of it is frustration and part of it is a sense that this segment of the economy is not very well understood by folks," said Mark Hamerlinck, the spokesman for the Minnesota Corn Growers Association.
He said even if ethanol is pushing up food prices, the nation's farmers deliver relatively cheap food: U.S. consumers spend about 10 percent of their income on food, about the least since 1929, according to statistics provided by the USDA's Economic Research Service.Star Tribune
