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Is corn the ‘new tobacco’ in Kentucky?
By TIM THORNBERRY
Kentucky Correspondent

FRANKFORT, Ky. — As farming has become a more diverse enterprise in Kentucky over the past decade, many farmers have learned not to put all their eggs in one basket. And in this year of extreme drought, that’s a good thing.

But an increasing number of producers are trying grain production for the first time as traditional tobacco farms become more expensive to operate and grain prices have reached all-time highs during the past year.

Corn in particular has seen a sustained increase. The latest price information listed the crop at just over $7.60 a bushel. Although that is down slightly, it is still in the $8 ballpark – a place corn growers want to be. At those kinds of prices, corn could start to rival tobacco as the crop that can generate the most revenue per acre.
Even in a year of drought, some states are reporting good yield projections. Minnesota is even forecasting record production for the year.

The forecast is not so good for Kentucky, except for isolated instances. Mike Spencer, a tobacco producer from Franklin County, is one of those who, as he puts it, was really lucky this year. In 26 seasons of growing tobacco, he tried his hand this year at growing corn for the first time because of the prices.

Although he has yet to harvest it, the 100 acres he planted shows the promise of high yields.

“It was planted the 19th of May when everyone else was three or four weeks in front of us, but when it was really hot and dry in June, my corn was about chest high and not tasseling,” he explained.
“I planted with no fertilizer on it because it was so dry. The second week of July, I dropped nitrogen on it and I got an inch-and-a-half of rain the next day.”

Spencer added in the following 10 days, his plants received an additional six inches of rain, making for an excellent corn crop. Early estimates indicate his yields could be as high as 150-180 bushels an acre.

He said with a $21,000 investment in his corn, this crop will prove the best turnaround he has seen in a long time; this, coming from a traditional tobacco farmer with an excellent tobacco crop, too, this year. He said the big difference between the two crops is labor.
Between him and another grower, they had only a 12-person crew to harvest 300 acres, which is certainly no easy task. Corn is more of a one- or two-person endeavor.

Spencer said it is conceivable to think that corn could indeed become more profitable than tobacco, with labor being what it is. “The one thing that is going to push me toward more corn is the labor issue. We have had the worst labor problems this year that we’ve ever had,” he said.

As with all crops, input costs have greatly increased, but Spencer said the profit margin for tobacco is way down from what it could have been.

That being the case, a strong tobacco crop will help with the bottom line and Spencer said the portion of his irrigated tobacco could weigh in as much as 2,800 pounds per acre, far above USDA National Agricultural Statistics Service October estimates.

He said even the tobacco that was not irrigated has cured well and could weigh between 2,300-2,500 pounds per acre. “You need a pretty high production to make it pay off,” Spencer said. “I would call this year one of the better years in the last five for tobacco.”
He noted there should be no problems in selling tobacco with new markets available this year, but he doesn’t think that is a long-term option. He also said with all things being what they are, his intentions next year will likely be to increase corn acreage and decrease tobacco production to a level of being able to handle the labor without having to find a crew and use only his barn space.
As traditional as tobacco has been, and still is when farming in Kentucky, corn could become the “new tobacco” if labor trends don’t change and grain prices remain high.

10/25/2012