What is in this article?:
• Dollar a pound prices buffed up the crown of King Cotton and just may bring it back to pre-ethanol acreage.
• Peanut contracts with more than one five in them seems to have rejuvenated interest in planting that crop.
• Corn at $5.50 a bushel is still a money-making proposition for most farmers, especially those in the upper Southeast.
2010 crop disappointing
At the end of the proverbial day, buyers hope growers will save enough land to produce enough peanuts to meet market and carryover demands. In the upper Southeast growers painfully remember the 2010 crop, which was over 1,000 pounds per acre less than yields in 2009.
While the high prices may influence some speculators to predict an increase in peanut acreage, that’s not likely to happen because of the high cost of getting into and out of the peanut business. Like cotton, peanuts require some specialized equipment and growers are not likely to invest on what may be a one-time contract offer.
Corn, soybeans and wheat have been an economically sound planting combination for growers in the Southeast, especially the upper Southeast, for the past few years. Corn prices look to remain fairly stable at $500-$550 for the 2011 crop.
The Southeast has not been a traditional corn production area, and in fact most states in the Southeast are grain deficit, because of large stocks of chickens, cows and hogs.
Nationally, for 2011, projected corn returns are considerably higher than projected soybean returns, suggesting that shifting acres to more corn away from soybeans will increase profits.
For example, in the Midwest, shifting 100 acres from soybeans to corn is projected to increase profits by $13,200 ($132 per acre).
Iowa State University Extension Grain Marketing Specialist Bob Wisner says, “Supplies are on a hair trigger. Any weather problems anywhere, any problems with the soybean crop in South America, for example, and prices are going to react. Any problems with corn and the lack of acreage in 2011 in the U.S., the market will react to that too.”
Wisner, along with most ag economists agree that losing tax credits for ethanol won’t significantly impact on corn prices, because the U.S. has a Federal mandate to produce alternative fuel and ethanol is the most currently accessible way to do this.
In the Southeast, corn acreage won’t likely change much in 2011. The rotational value of the crop, combined with its ease of production, timing of production and high cash value will make it hard for growers to switch to more lucrative crops, like cotton.
Forty bushel per acre soybeans and 80 bushel per acre wheat has been a tough double-crop combination to beat for growers in the Southeast in the past few years. The combination of cotton at better than 90 cents a pound, peanuts at $600 per ton and corn at $5.50 per bushel may just push bean acreage down in the Southeast in 2011 — maybe.