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Date: 2024-06-23 Page is: DBtxt001.php txt00013185

USA / Agriculture

Corn ... The Crop That Ate America ... corn dominating in agriculture


Peter Burgess

Digging corn ground for spring planting east of Arthur, North Dakota.

Corn ... The Crop That Ate America

Farmers who had long rotated plantings among a diverse group of grains are increasingly turning to a single one. Corn has always been a mainstay of U.S. agriculture, but its increasing profitability has driven up corn's share of total production, while grains such as wheat, oats and sorghum have steadily fallen, according to a Bloomberg analysis of a half-century of crop data. This locks farmers, as well as machinery-makers including Deere & Co., to the rises and falls of one crop, as both domestic and export markets grow more and more tied to the dominant U.S. grain. That exposes farmers to greater volatility and greater trade risk if a major buyer, such as Mexico, were to decide to stop buying U.S. corn. Corn will make up 68 percent of this year’s projected harvest of major U.S. grains and oilseeds this year, according to data the U.S. Department of Agriculture released Wednesday. That’s up from 47 percent in 1968. New markets and technology have made corn more profitable compared to other crops, which is why longtime farmers once devoted to competitive grains have switched to the nation’s number-one source for biofuels and cattle feed. Corn muscles its way to dominate the harvest: 2016 Production in billions of bushels Replay 65M Oats 0.2B Barley 0.5B Rice 0.5B Sorghum 2.3B Wheat 4.3B Soybeans 15B Corn Kevin Skunes is a fourth-generation farmer outside Arthur, North Dakota. On his 6,000 acres, he currently raises about 55 percent corn, 45 percent soybeans. This constitutes a big change since Skunes was a child in the 1960s. Back then, the farm was about 2,000 acres of wheat, barley, sunflowers and soybeans, with no corn. Sunflowers disappeared in the 1980s. Skunes raised his last barley crop about 15 years ago, his last wheat about a dozen years ago. He started experimenting with corn in 2001, becoming such a convert that he’s now a vice president at the National Corn Growers Association. He’s also raised sugar beets, common to the Northern Plains and almost nowhere else in the U.S., and dry edible beans.
Kevin Skunes with his dogs, Jack and Ike, in front of bins full of corn. But corn’s spread is unstoppable, he said—the economic case remains too strong, even with prices now less than half what they were five years ago. 'It was mostly the price of corn, along with the yields. The yields on wheat were not keeping up,' Skunes said. 'Corn just came up as the one that made money. It’s a little more work to grow, and you need some more equipment, but if you’re in a business and you see the money is there, that’s what you do.' Corn yields catch rice: 2016 Yield in bushels per acre Replay 66 Oats 78 Barley 78 Sorghum 161 Rice 53 Wheat 52 Soybeans 175 Corn Pushing along the economics were shifts in technology and markets. The U.S. approved genetically modified (GMO) corn and soybeans for planting in 1995. That reduced those crops’ risk of disease and simplified their cultivation, gains that weren’t matched in non-GMO wheat and other grains. Ethanol also came on the horizon, with federal legislation in 2005 and 2007 creating new government requirements for biofuels largely made from corn. That led to a proliferation of ethanol plants, providing a new outlet for an ever-more-productive crop.
Bob Davis checks the monitor while planting corn on the Kevin Skunes Farm northeast of Arthur. The monitors tell him soil depth, seed spacing, moisture, seed count and fertilizer levels.

“The shift really came in the early 2000s. The corn varieties really started to improve, and you could see it rising. Biotech played a role in that. The biotech varieties of corn and soybeans kept coming, and wheat and barley didn’t have that,” Skunes said.

“Now we have quite a few ethanol options. Hankinson is about 90 miles south, Casselton is 15 miles. We have a pretty good nearby market for ethanol.”

Farmers typically rotate crops, and soybeans have long been a favorite in eastern North Dakota because of how the oilseed prepares the soil for grain crops. And it still is. But now, farmers are increasingly pairing soybeans with corn.

“Over time we went from wheat, barley and soybeans to corn and soybeans.”

Corn (and soybeans) eat wheat’s acreage: 2016 Harvested acres, in millions Replay 2.6M Barley 87M Corn 1M Oats 3.1M Rice 6.2M Sorghum 83M Soybeans 44M Wheat

Corn’s rise has transformed the American landscape. Rice, the only crop that can compete with corn in yields, has held on to its acreage in the regions where weather and soil conditions allow it to be grown, and sorghum has had a mini-revival on the Southern Plains, thanks to buying interest from China. But the U.S. Corn Belt has moved north and west, taking with it soybeans, the crop that tends to fit best in rotation with corn. The expansion has taken land away from wheat, once the top U.S. staple grain, and completely driven oats and barley from some parts of the country. Farmers in Cass County, North Dakota, where Skunes lives, harvested 291,500 acres of corn last year—a quarter-century ago, they reaped 80,400. Barley, meanwhile, went in the other direction, with 13,700 acres of grain primarily used for beer last year, versus 109,500 acres in 1992. “If you drive around Arthur now, you'll see a couple of wheat fields, and the rest is corn and soybeans. Thirty years ago, you would have seen sugar beets, wheat, barley, soybeans, edible beans, a few sunflowers.”

A 36-row corn planter working on the Kevin Skunes farm northeast of Arthur, North Dakota.

Skunes doesn’t see anything displacing corn on the horizon. At this point, the infrastructure, from combines to grain bins to ethanol plants, has become entrenched. Still, farmers are always willing to experiment, he said. And some farmers who don’t want to be locked into corn markets and who have the right equipment are growing alternative crops.

“We’re getting better at raising wheat, and the farmers who do raise it around here raise a really high-quality grain,” he said. “Navy beans and other legumes are also attractive in the northern climate and get high demand from local buyers,” he said. “Edible soybeans are also getting some attention. You can use the same equipment you use for other soybeans, you just have to keep the edible beans separate to make sure they don’t mix with the GMOs.”

The view from the top of one of Kevin Skunes's 30,000-bushel corn bins.

“What corn has done is give us much more profit” because of the higher yields and expanding markets, Skunes said. The effect has been a boon to the local economy, he said. “Farmers share the wealth. We buy new equipment, we add storage. We have a hard time hanging on to our cash.”

Source: USDA data compiled by Bloomberg. Data is rounded.

By Alan Bjerga, Jeremy Diamond and Cindy Hoffman / Photogaphs by Holly Anderson/Bloomberg
May 11, 2017
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