Lower Yield Still Equals High Reward

By: Stephen M. Frazier, Senior Staff Member

Corn prices are at an all time high and grain farmers are cashing in. Projections indicate that corn prices will remain high for the rest of the year, and potentially into the first part of 2012. As a result, farmers are skipping crop rotations and replanting corn in fields where corn was grown the previous growing season. This practice is known as corn-on-corn crops.

Crop rotation is a practice used by farmers where they rotate the planting of wheat, corn, and soybeans on farm land. This is often necessary because the continuous growing of corn, particularly in no tillage situations, leads to an increased incidence of crop disease.[1] This is especially true of diseases that are caused by pathogens that survive in crop residue or in the soil.[2] Additionally, crops rotation helps to decrease the growth of weeds, crop residue, and insects that would otherwise occur in fields that were continuously planted with the same crops. Finally, experts tend to agree that crop rotation is needed to maximize the yield on crops. Failure to do so normally results in a 10 to 20 percent harvest decline from prior year yields. [3]

Despite serious negative implications, corn-on-corn crops are becoming a worthwhile gamble for many grain farmers. The Chicago Board of Trade corn futures hit a record high of nearly eight dollars a bushel in June.[4] Farmer Brian Schaumburg of Illinois echoed the sentiment of many farmers regarding the planting of corn-on-corn crops. Schaumberg stated that, “[l]ast year and this year, we’re seeing a little drag but, even so, corn pays,” and “[c]orn on corn hurts in some places but there’s places it’s awful good.”[5] As a result of the increasing corn prices, experts tend to believe that farmers are and should be “willing to plant corn after corn as long as yields do not decrease much beyond 20 bushels [per acre] versus corn after soybeans.”[6]

Farmers have experienced turbulent times during the past half decade. The rising fuel costs, economy woes, and frequent droughts have left farmers struggling to make a profit. Therefore, many farmers see the high corn prices as a means to recover past losses. While failing to rotate crops may have some negative implications, the potential for large profit margins in many cases outweigh those risks. However, farmers need to consider the future costs of failing to rotate their crops.

[1] Paul Vincelli, Corn & Soybean News, Cooperating Departments: Agricultural Economics, Biosystems and Agricultural Engineering, Entomology, Plant and Soil Sciences, Plant Pathology, Volume VII, Issue II (2007), available at http://www.uky.edu/Ag/CornSoy/cornsoy7_2.htm.

[2] Id.

[3] High Corn Prices Stall Midwest Crop Rotation, Earthweek (Sept. 30, 2011),http://www.earthweek.com/2011/ew110930/ew110930b.html.

[4] Michael Hirtzer, Insight: Chasing high corn prices, U.S. farmers skip rotations, Reuters (Sept. 25, 2011), http://www.reuters.com/article/2011/09/25/us-usa-corn-harvest-idUSTRE78O1ZY20110925.

[5] Id.

[6] Id.