Important choicesArea farmers are evaluating which crops to plant this spring. Crop prices are high enough that most crops project a profit, at least on paper. But complicating the decision — and possibly accelerating the need to make firm planting decisions — is a shortage of seed for many crops.
By: Jonathan Knutson, Agweek
Like other veteran area farmers, Donald Streifel remembers winters when he struggled to identify even one crop that held much potential for profit in the upcoming growing season.
This winter is different.
“The numbers look pretty good,” says Streifel, a Washburn, N.D., producer who’s been farming since 1977.
The outlook for 2012 lost some of its shine, at least temporarily, after grain prices plunged Jan. 12, when this issue of Agweek was preparing to go to press. The U.S. Department of Agriculture released several reports pointing to bigger-than-expected domestic supplies of major grains.
Even so, most crops grown in the Upper Midwest have a fighting chance to be profitable in 2012 if the weather cooperates.
In fact, the North Dakota State University Extension Service’s 2012 Crop Budget calls for nearly every crop to make money this year.
The outlook for corn — which, along with wheat and soybeans, is one of the region’s three major crops — is particularly bright.
“The market definitely favors corn right now,” says Tom Lilja, executive director of the North Dakota Corn Growers Association.
But farmers face at least one potential complication: seed shortages may limit their planting choices this year.
Seed shortages of some crops “are almost a certainty” going into the 2012 growing season, according to the North Dakota State Seed Department.
Put most of the blame on bad weather in 2011, which led first to fewer acres being planted and ultimately to less high-quality seed available for planting this year.
Keep the seed shortage in perspective.
A farmer who wants to grow a particular crop should be able to find seed for it, though he may not be able to obtain the seed variety he prefers, says Steve Sebesta, North Dakota’s deputy seed commissioner.
One more thing to consider: some farmers bought seed a year ago that they were unable to plant in the spring of 2011 because of wet conditions. At least some of that seed remains in storage and should be available for planting this spring.
In any case, farmers who still need seed “should check with their local dealer right away,” says Adam Spelhaug with Peterson Farms Seed in Harwood, N.D.
There’s both good and bad for area farmers going into 2012.
The main positive:
Crop prices, though lower than a year ago, remain high by historic standards. For instance, spring wheat is averaging $7.81 per bushel at area elevators surveyed weekly by Agweek, compared with $9.24 per bushel a year ago and just $5.04 per bushel two years ago.
The main negative:
Expenses continue to rise. Total costs per acre will be 10 to 15 percent higher than a year ago, led by increased prices for land, seed and fertilizer, according to the NDSU Extension Service.
Andy Swenson, an NDSU Extension Service farm management specialist who has worked on the annual crop budget for many years, says that, given rising expenses, he was pleasantly surprised to see 2012 projected profits as high as they are.
Of course, the NDSU numbers are just projections. Uncooperative weather could cut into actual profits, as would lower-than-projected crop prices or higher-than-projected expenses.
Acreage winners, losers
This is the time of year that the annual “battle for acres” is waged. Enough acres must be allocated to all the crops grown in the region so that production of each crop can meet demand for it. If the market senses that acreage for a crop might be insufficient, the price of that crop rises to make it more attractive to growers.
Farmers, for their part, weigh prices of the competing crops against their willingness and ability to grow each of the crops.
For instance, malt barley prices are high and the crop ranks near the top of projected profitability in the NDSU Extension Service’s 2012 crop budget. But farmers who haven’t grown barley in the past — and may not live in an area where the climate is well suited to it — are unlikely to plant the crop this year, even with the attractive prices.
Producers seldom make wholesale changes in what they plant from year to year. Farmers generally stick with a cropping rotation, alternating two or three crops on a field in a two- or three-year planting cycle. Rotating crops brings a number of benefits, including reducing the threat from insects and crop disease.
But most farmers have at least a few “flex,” or discretionary, acres that can vary within their rotation.
Corn is expected to pick up discretionary acres, probably at wheat’s expense, this spring.
South Dakota farmers likely will plant less wheat and more corn this spring, says Randy Englund, executive director of the South Dakota Wheat Commission.
Kurt Krueger, a Rothsay, Minn., farmer, hasn’t firmed up his planting intentions yet. But he says he’s “tottering on the edge” of not planting any wheat because of relatively attractive corn prices.
Krueger, president of the Minnesota Soybean Growers Association, says he thinks soybeans will do fine this spring in the region’s annual battle for crops.
“Soybeans are a very accommodating crop,” he says.
Soybeans are considered a relatively easy crop to grow, one that doesn’t require as much expertise and special care as some other crops.
Another thing to keep in mind: weather conditions this spring will influence how much of each crop is planted. For instance, a dry, early spring could encourage farmers to plant more wheat, a cool-season grass that typically does best when planted early.
Dry bean rebound?
Dry edible beans are among the crops being watched particularly closely this winter.
Dry beans project the highest return — $160 to $200 per acre — in areas where the crop is grown, according to the NDSU crop projections.
Dry bean prices are strong after a poor 2011 harvest reduced supplies of the crop. North Dakota leads the nation in dry beans production.
North Dakota farmers last year harvested only 4.88 million hundredweight of dry beans, the smallest amount since 1971 and down a whopping 58 percent from 2010, according to the National Agricultural Statistics Service, an agency of the U.S. Department of Agriculture.
The exceptionally wet spring last year cut sharply into both planted acreage and yields. In 2010, North Dakota farmers planted 800,000 acres of dry beans that averaged 1,490 pounds per acre. In 2011, farmers in the state planted only 410,000 acres of dry beans that averaged 1,300 pounds per acre.
Streifel, president of the Northarvest Bean Growers Association, says he can’t predict how many acres of dry beans will be planted this spring.
“I honestly don’t know,” he says.
Dry beans can be a difficult crop to raise, and some farmers may decide to plant other crops, even if dry beans project a higher profit, Streifel says.
Spotlight on barley, too
Barley is another crop that’s receiving a lot of attention this winter.
Barley production has been declining in North Dakota for years, and in 2011 the state dropped from its traditional spot as the nation’s leading barley producer.
Farmers in the state increasingly have found that other crops are more profitable than barley. That’s especially true when barley sells as feed, which typically fetches a much lower price than malt barley. As their names imply, feed barley goes for livestock, while malt barley is used for beer.
This winter, however, the potential profit from raising malt barley is strong. The NDSU crop budget projects that barley will produce higher returns per acre than most other crops.
In theory, that will encourage farmers who have grown barley in the past to plant more of it this spring. But the reality may be otherwise, says Greg Kessel, a Belfield, N.D., farmer and a member of the North Dakota Barley Council.
In the past, many farmers were disappointed when they had to sell barley that they thought would receive malt price for the lower feed price. Those memories may keep some farmers from planting barley this spring, he says.
Shortages of seed for some barley varieties also could impact how many acres of the crop are planted.
Certified seed shortages
Farmers who need certified barley seed to fulfill malt contracts in 2012 are having trouble getting seed, according to the North Dakota State Seed Department.
The number of acres in certified seed production last year was the lowest on record, partly reflecting difficult planting conditions, the State Seed Department says.
The department is working with the barley industry to identify sources of certified seed, says Sebesta, North Dakota’s deputy seed commissioner.
Certified seed is seed of a known variety produced under strict conditions that maintain the variety’s purity.
As an alternative to certified seed, farmers can save seed from harvested crops and plant that seed the following year.
However, planting certified seed has several advantages, including access to new, better seed genetics, increased seed purity and a reduction in the spread of disease in a field, according to information from the North Dakota State Seed Department.
Sebesta says that seed shortages could cause some farmers to violate state seed laws — and to risk costly penalties.
Both sellers and buyers who break seed laws can be fined up to $5,000 per sale, according to the North Dakota State Seed Department.
Sebesta urges farmers with questions about certified seed to contact his department.
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