Why Not All Corn in 2007?

The projected increase in the demand for corn in the United States makes more American farmers eager to plant corn again after a previous corn crop. An analysis done by the FarmDoc project at the University of Illinois indicates that there are many risks on growing corn continuously.

Among the risks of the all corn strategy include possible lower returns due to different price and yield scenarios. Alternating soybean with corn may allow farmers to derive returns on soybeans especially when it exceeds $9.61 per bushel and/or yields goes above 66 bushels per acre. Lower returns on continuously growing corn can also happen when corn yields fall below 146 bushels per acre, or corn prices drops below $3.27 per bushel.

When more corn is planted, several other concerns also arise. These include problems related to pests and diseases where a larger area is affected, and more lengthy harvesting time which may result to yield losses. There is also evidence that higher profitability can be obtained for corn-after-soybeans. This will not be realized in 2008 when corn is planted after corn this year.

The complete report is at http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_03/fefo07_03.html