By TIM THORNBERRY
Kentucky Correspondent PRINCETON, Ky. — What a difference a year makes. In 2007, corn was the key word, despite early troubles with an Easter freeze and a summer drought, while soybeans took a backseat in production, to the tune of 295,000 fewer acres in Kentucky.
But 2008 could be the soybean year for many reasons; with lower supplies, high demand and prices, not to mention the logical crop rotation for Kentucky farms according to Kenny Burdine, University of Kentucky (UK) agricultural economist.
“Farmers will have to respond to the market,” he said. “It doesn’t mean they should totally abandon their crop rotation, but there will be a shift toward more beans.”
And that doesn’t mean corn will take a big downswing.
Prices are still very good and the energy issue (ethanol) is still a major factor in production decisions. Corn growers in western portions of Kentucky, however, are getting off to a slow start thanks to above-normal rainfall across the state keeping many fields too wet or underwater.
Clint Hardy, the UK extension agent for agriculture and natural resources in Daviess County, said the weather has made corn planting late this year, but not too late.
“We’ve had quite a lot of flooding, causing the (Ohio) river to back out on some land, which is finally dropping. If we can get a break, the farmers have the manpower and are equipped to get a lot of corn planted in a short period of time,” he said. “If we can get our corn planted timely, which means planted before about the 10th of May, I don’t expect to see reduced yields.”
Hardy also said many wheat fields damaged by the spring freeze last year were replanted in corn, but with a natural rotation and many of the corn acres losing ground to wheat planting last fall, soybeans look to rebound this year – especially in those flood-prone acres which have been unable to sustain any planting so far this season.
Chad Lee, UK agronomist, said, “Based on conversations I had with people, I expect to be closer to 2006 numbers this year. We got off to a late start planting corn in Kentucky, but I don’t think we have that many soybeans to switch over to. If corn gets into the ground in the next two weeks, we have a good chance for good corn yields.
“Farmers are going back to putting a few more soybeans in because, one, when they were buying feed, soybeans looked very profitable on the Chicago Board of Trade (CBOT); secondly, because of the increase corn acres last year, they’re going back to a more normal rotation, causing a more normal operation, logistically.”
Those 2006 numbers included 1.04 million harvested acres of corn for grain and 1.37 million harvested acres of soybeans. Lee also emphasized though prices are high right now, input prices are high as well, so farmers may only have a year or two of seeing a marked profit. But overall, farmers are resourceful and they will adapt.
Most early projections emphasize fewer acres of corn will be planted this year along with an increase in soybeans, but all grains are expected to do well. Demand for corn, wheat and soybeans is expected to remain strong through 2008, and barring major weather problems, it should be a profitable year for grain producers, Burdine said.
As far as forward-pricing is concerned, Burdine said prices for 2008 corn and soybeans have been trading in the $4 and $10 range, respectively, on CBOT and with prices at these levels, it is not too early to price a portion of the 2008 crop.
“But if anything was learned in 2007, it was that contracting too high a percentage, too early, can leave you worried about making delivery,” Burdine said.
“So, since the crop isn’t even in the ground, farmers need to be realistic about the amount of grain that is forward-priced.”
This farm news was published in the April 23, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
