The following guest blog was written by Fred Yoder, an Ohio grain and wheat farmer and a co-chair of Solutions from the Land:
Farmers will supposedly plant a whopping 97 million acres of corn this year, prompting the question of why are planting intentions so big when it is predicted that demand for corn will continue to decline. Here are my thoughts as to why this may be happening.
First, most buying decisions for crop inputs and business plans were made during the winter, and a significant amount has already been paid for. Those acres that are going to corn are usually either following soybeans, or in many cases following a cover crop due to prevented planting in 2019, which makes it ideal to plant corn after introducing a bio-diverse cover crop.
Or, in many cases, there has already been instances of two years of soybeans previously planted because of disruption during the planting season due to wet weather. Going with soybeans three years in a row is asking for trouble when it comes to disease pressure, and depending on which disease may be present, it can hang around for a long time.
So, in some ways, more corn may be planted based on SfL’s recommendations of biodiversity and regeneration of our soils. And since many farmers flip from corn to soybeans to corn, and those acres did not all get planted last year, it is important for some to get back in step with their rotation.
Second, it is pretty hard to swallow the planting intentions of 97 million acres. That would be a record, despite the fact that some farmers are on the edge of financial disaster and may not even have secured operating loans yet, I can’t see a scenario that would play out to make that kind of corn acreage happen. Besides, it is turning out to be a very wet start of the planting season, which also casts doubt on getting that many acres planted. I believe farmers are looking at projected planted acres and believe that nowhere near 97 million acres will be planted to corn.
If you look at what the seed companies are reporting as seed delivered to farms, it doesn’t add up either. So, rather than sit on inventory until next year, and assuming there will already be a shift to more soybeans, I believe most farmers are betting that both domestic and global demand for corn will pick up sometime before harvest. As they say, the cure for low prices is low prices.
Third, many believe that as our domestic biofuel demand is down, there may be a significant chance to increase export of ethanol to other parts of the world to help in their efforts to clean up their air. The U.S. Grains Council (USGC) has been working hard to find those markets and expand our sales since we are probably the lowest cost producer of biofuel in the world at the moment. Domestic support seems like it may be at risk in light of the coronavirus upheaval. We don’t even know if the Renewable Fuel Standard will survive the political games being perpetrated by the U.S. EPA and Big Oil.
These factors lead us to consider these questions:
- What could be put in place to help this scenario? It must be understood that these planting decisions are layered with unintended consequences if changes are made.
- How will my federal crop insurance policies be affected?
- Will I sacrifice some crop history if I make last minute changes? What can I do to minimize my risk? What if there was recognition of the ecosystem services I may be providing to the public as I adopt practices that not only save, but build my soil structure, enhance water quality, as well as sequester carbon?
Perhaps carbon could be considered as the next corn or soybean commodity, encouraging farmers to be rewarded for regenerating our topsoil to ensure future generations of farmers have a better chance to feed the world in a more sustainable way.
Finally, it has been my experience over the last 40 crops that making knee-jerk decisions based on current market predictions usually don’t pan out. So, with any luck, this farmer will stick to the plan and hope things work out in the long run. I really don’t like the scenario cited often by my good friend (and SfL co-chair) A.G. Kawamura: “We farmers are notorious for negotiating to lose less, yet here we are.”