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May 25, 2012
From Wayne Schoper and Rich Baumann - South Central College

Since 2007, commodity prices have had great price volatility. This volatility increases a farmer's exposure to risk and may provide fewer opportunities to market for a profit.

A prime example of price volatility is the price of corn. As recently as June of 2010 we saw corn prices of under $3. Within a few months corn was over $7 per bushel.

The South Central College Farm Business Management compilation of 1207 farms (2011 Data) showed an average yield of 171 bushels with a cash cost of production of $3.71 per bushel. Once we factor in overhead and management this cost of production for a bushel of corn rises to $4.45 per bushel.

For 2012, with higher fertilizer prices and other inputs on the rise (including cash rent) corn cost of production figures to be over $5 per bushel. As of this writing, new crop corn (2012 production) is at $4.73 per bushel, well under the cost of production. Are we at the end of high corn and soybean prices? Only time will tell. So much depends on world markets and weather, both factors out of our control.

Most producers are currently applying post-emergence herbicides for weed control in corn and soybeans and will be for the next couple of weeks. They are hoping for some rain-free days, with a minimal amount of wind, to provide for good spraying conditions. With the high amount of acres planted to "Round-up Ready" corn hybrids and soybean varieties, or similar crop genetics, a majority of the weed control in corn and soybean production is accomplished through the use of post-emergence herbicides that are applied after the crop and the weeds are emerged and growing.

By comparison, 10-15 years ago, post-emergence herbicides for weed control were secondary to the use of soil-applied pre-plant and pre-emergence herbicides to control weeds before they emerged. In addition to giving crop producers better options and more flexibility for weed control, the move toward a higher percentage of post-emergence herbicides has also been more environmentally friendly. The post-emergence herbicides are generally safer to use and are much less likely to run-off into lakes, rivers, streams, or tile lines, as compared to many of older soil applied chemicals.

2012 FARM PROGRAM SIGN-UP

Eligible farm operators and land owners have until June 1, 2012, to enroll in the 2012 DCP farm program at County Farm Service Agency (FSA) offices, including the ACRE program for 2012. As of mid May, only about half of the producers were enrolled in the 2012 DCP farm program in many counties. Producers must enroll in the 2012 DCP farm program in order to receive direct payments for 2012 on eligible crop base acres, as well as other program benefits.

Producers that previously enrolled in the ACRE for the 2009, 2010 or 2011 crop year will be enrolled in ACRE for 2012, provided that they sign-up for the 2012 DCP farm program at County FSA offices, and meet all other program criteria. Other producers can enroll in ACRE for 2012 when they sign-up for the 2012 DCP farm program, or at anytime until June 1, 2012.

ACRE enrollment does require a signature from landlords on cash rental farm units, and results in a 20 percent reduction in direct payments for 2012. Producers are encouraged to analyze situations and scenarios that are more favorable for ACRE enrollment for 2012, as compared to continuing with the traditional DCP farm program.

For more information on the ACRE program or 2012 DCP farm program sign-up, producers should contact their County FSA Office, or go to the USDA FSA web site at: www.fsa.usda.gov/FSA

 
 

 

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