Thinking of "Corn after Corn"? Pencil it Out First!

Higher corn prices have many wondering if planting more corn acres next year might not be a bad idea. But are prices high enough to trigger a switch that will change your crop rotations and have other long term effects? Some of the questions to ask when looking at “2 nd Year Corn” are:

1. Yield – How much less corn yield can you stand on corn after corn acres?
2. Nitrogen – How many more extra lbs. of N are needed to raise corn after corn?
3. Crop Protection – How much additional cost will be involved when faced with some form of rootworm control (seed trait or insecticide) and possibly additional fungicide cost for corn disease pressure?
4. Bottlenecks – Will there be unaccustomed “bottlenecks” due to managing more corn acres?
   1. Planting Bottlenecks – Farms accustomed to and equipped for planting corn and soybeans simultaneously might encounter problems with getting crops planted in the “optimal window”.
   2. N-Application Bottlenecks – Farms already pushing the envelope on pre-plant or side-dress timeliness may need bigger equipment or help via “custom hire”.
   3. Harvest Bottlenecks – More corn acres means more volume to harvest, transport, dry and store.
5. Long-Term Pest Problems – Will Corn after Corn result in increased weed, insect or disease pressure? Or will this be a net positive as the 2 nd year of corn may help with problems such as glyphosate resistant weeds, soybean cyst nematode, soybean foliar disease and other problems inherent to soybean production. (This one will vary much from field to field and region to region.)

My initial budget drafts of 2007 variable costs (operating expenses) for 2 nd Year Corn and Soybeans (after corn) are below. Caution: Your costs may vary considerably from those listed. Be sure to pencil your own numbers out!

Assumptions:

1. Yield decrease of 10% from corn-soybean rotation yield average due to “corn after corn”.
2. Additional 30 lbs. of N applied.
3. Rootworm control via “traited” seed.
4. No foliar fungicide required in corn.
5. No soybean fungicide or insecticide cost for rust or aphid control. These added costs will make the argument stronger for “corn after corn”.
6. No adjustments made for 20% refuge requirement for planting Bt Rootworm corn. In refuge growers would have to use soil insecticide or high rate of seed insecticide for rootworm control.

My brief (and rough) estimates of the present “Contribution Margin’s” (or what’s left to pay land, machinery and labor/management) of 2 nd Year Corn versus Soybeans. The following table shows gross receipts minus variable (or operating) expenses (shown above). Caution: Your relative yields and direct payments may vary considerably from those listed. Be sure to pencil your own numbers out!

Is this “advantage enough to offset probable higher fixed costs for corn? Higher labor and machinery costs for producing an acre of conventional corn versus an acre of no-till “glyphosate resistant” soybeans may require more of an advantage for corn when comparing their “contribution margins! So do we need an even higher ’07 fall delivery corn price (relative to soybean prices)? Pencil it out!