Wednesday, April 20, 2016

Looking ahead to 2016: Planting date decisions

We started planting corn on April 14. Recent planting progress statistics from USDA-NASS indicate that corn planting is progressing slowly in the northern Corn Belt. Only 1% of corn acres had been planted in Wisconsin as of April 17.

The date that produces maximum corn grain yield varies by field, tillage practice, hybrid and latitude. Every year since 1991 we have established a planting date experiment at Arlington, WI. On this farm, if you could plant all of your corn on one date and wanted to maximize yield, then the best date would be May 1 (Figure 1). As expected, we have observed a step increase for yield every decade. However, the maximum yield planting date has not shifted much (April 28 to May 4). The economic optimum is going to be earlier than these dates, because typically earlier planted corn is drier at harvest. The planting date "window" when we can be within 95% of the maximum yield is between April 18 and May 16. Grain yield decreases 0.5 bu/A per day on May 15 and accelerates to 2.5 bu/A per day on June 1.

For southern Wisconsin we typically recommend to begin planting anytime after April 20 as long as field conditions are fit. For northern Wisconsin anytime after April 30 is appropriate. Soil temperature is not a consideration after these dates. However, we do pay attention to the short-term weather forecast. If cold, wet conditions within 48 to 72 hours of planting are predicted, it is prudent to wait until weather is more favorable. We lost trials at Seymour and Fond du Lac in 2006 when we planted ahead of a snow storm; the only corn that survived was over the drain field. This phenomenon is called imbibitional chilling. There is not a lot of field data to support this practice and it has only happened to us twice over the last 20 years. The challenge as to when to begin planting, is what to do between April 10 when insurance coverage starts and the typical April 20 (southern) and April 30 (northern) start dates. Soil temperature is a good guide during this period. Corn doesn't grow much when temperatures fall below 50 degrees F.

Figure 1. Corn grain yield response to planting date by decade at Arlington, WI. The 1970s included data from experiments conducted during 1974, 1976, 1977, and 1978; 1980s included 1980 and 1981; 1990s included 1991 to 1999; 2000s included 2000 to 2009; 2010s included 2010 to 2015. (click to enlarge)

Thursday, April 14, 2016

Looking ahead to 2016: Plant density decisions

I have been receiving many questions this year regarding the "correct" plant density for corn. Growers are concerned about 2016 production economics and one input they are looking at is seeding costs related to plant density in the field. The optimum plant density is influenced by both seed cost and grain price. As seed costs increase and/or grain price decreases the "correct" plant density shifts lower.

Every year since 1982, plant densities have been increasing by about 300 plants/A. Seed costs during the 1980s were about $20/A and plant densities were a little over 20,000 plants/A. Today seed costs are over $100/A with USDA-NASS plant densities around 30,000 plants/A. Today a typical 80,000 (80K) count bag of seed costs $300/bag, so each 1000 plant/A adjustment means $3.75/A.

The best way to approach the decision to determine the "correct" plant density for a field is to find the plant density where the maximum yield (MYPD) occurs. Figure 1 shows 10-yrs of data from Arlington experiments that tested corn grain and silage response to harvested plant density. In this example, the grain MYPD occurs at about 39K. The economic optimum (EOPD) is about 4K to 5K less than the MYPD. However, you can be within 95% of MY at about 29K indicating how “broad shouldered” the plant density response is (a 10K swing = $37.50/A at $300/80K bag). When the cost of production and ultimate economics are not favorable like this year, you may want to think hard about going after MY, but make sure you are above 29K.

On the silage side it is more difficult to find the EOPD. I have always approached the silage EOPD from the Milk per Acre measure, but that does not take into account seed costs. So in the attached example, Milk per Acre is maximized at 45K. I would think that you need to subtract 4K to 5K to get at the silage EOPD. It will fluctuate widely with milk price and given the outlook for this year you may want to lower the plant density 8K to 10K. Again you are still within 95% of maximum Milk per Acre above 29K.

Figure 1. Relationship between corn plant density and grain yield, economic optimum, forage yield, Milk/Ton, and Milk/Acre. Data are derived from Arlington during 2005 to 2014. (click to enlarge)
Every hybrid and every field likely has different MYPD and EOPD values. Breeders are constantly improving standability of corn hybrids, so the MYPD has been increasing every year by about 400 plants/A. In addition, environment and management style will influence these values (i.e. drought versus a normal year). This relationship indicates the ability of the corn plant to compensate for discrepancies in plant density, but it is highly influenced by grain/silage/milk prices and input costs. It also says a few things about the implications of variable rate seeding.

Wednesday, April 6, 2016

Looking ahead to 2016: The Economics

This spring farmers have been slow to make decisions on a number of inputs. Reluctance has largely been due to weather concerns and economics. The acreage intentions report last week did not help. Corn and soybean prices immediately decreased.

The USDA-ERS has been collecting cost of production (COP) data since 1975. These costs are based on the actual costs incurred by producers. A base survey is conducted every five years. The an annual Agricultural Resource Management Survey (ARMS) has been used to modify the survey base since 1996. These costs of production excludes costs for marketing and storage. ARMS data collection starts during the fall when production practice and cost data are collected, and finishes in the spring when a follow-up interview collects data about whole-farm costs like overhead, interest, and taxes. New data becomes available every May. Each farm sampled in the ARMS represents a known number of farms with similar attributes so that weighting the data for each farm by the number of farms it represents provides a basis for calculating estimates. The country is divided into 9 regions. Wisconsin is part of the Northern Crescent region. Many of the Corn Belt states are in the Heartland region.

Figure 1. Farm resource regions used to summarize cost of production data. (click to enlarge)

Figure 2 shows the cost of production (COP) estimates, profit and COP forecasts for corn in the Northern Crescent and Heartland regions of the U.S. Cost of production has steadily increased over the last decade. Growing an acre of corn costs around $650-$700 per acre on average. For farmers in the Northern Crescent profits have only been seen during 2010 to 2013. Farmers in the Heartland have seen a few more profitable years. Even though yields increase, COP increases as well and average profitability was negative in 2014.

Figure 2. USDA-ERS cost of production (COP) estimates, profit and COP forecasts for corn in the Northern Crescent and Heartland regions of the U.S. (click to enlarge)

Figure 3 itemizes COP for the Northern Crescent and Heartland regions. The categories of seed, fertilizer, equipment and land have increased dramatically since 2005. While the categories of chemicals, labor and overhead have not changed much. Land prices are higher in the Heartland region than the Northern Crescent.

Figure 3. USDA-ERS itemized cost of production (COP) estimates and COP forecasts for corn in the Northern Crescent and Heartland regions of the U.S. (click to enlarge)

The economic challenge of farming during 2016 is more real at this point than other challenges like weather. However, there are still things that can be done to manage for these challenges. Over the next couple of weeks we will discuss some of those options here. Some further reading should include the article "Do We Grow Another Bushel or Save a Buck?"

Tuesday, April 5, 2016

Do farmer acreage intentions predict actual planted acres?

Last Thursday USDA-NASS came out with crop plating intentions for the U.S. This report along with the ending stocks report dramatically influences markets. Last week was no exception with market prices decreasing  with the news that 2016 corn acreage intentions were up 6% and soybean acreage intentions were down 1% from 2015 planted acres. Nationally, ending stocks were up 1% for corn and up 15% for soybean.

The acreage intentions report can influence the crop rotation decision for a field, especially for corn. I was curious as to how well the acreage intentions report reflected actual planted acres, so I collected data back to 1975 for every state that produces corn and compared acreage intentions with planted acres for the year. The results are shown in Figure 1.

Figure 1. Spring Acreage Intentions, Planted Acreage and the Relative difference (%) for Corn and Soybean in the US and WI. (click to enlarge)
With the exception of 1983 and to some extent, 1993 and 1995, acreage intentions have accurately predicted planted acres within 5%. There are as many years over-predicted as under-predicted. For the 40-year period, there was a 3% standard deviation between intended and planted acres for corn and soybeans. In WI, which is typical of northern Corn Belt states, there was wider standard deviation (corn = 5%, while soybean= 11%) indicating weather impacts on acreage decisions as the planting season progresses.