Corn: Survive and Thrive on Low Price Projections

Corn: Survive and Thrive on Low Price Projections


Hello, my name is Joe Lauer and I am a corn agronomist at the University of Wisconsin. Right now the projections are to have a very low price outlook and this is part of a series to address some of those concerns. What I want to start with is What I want to talk about, really, is just the yield limiting factors and profitability limiting factors that are typically encountered with corn production. We’ve enjoyed a number of good years, and now we’re kind of back to the future, if you will, in terms of our price outlook in profitability. If you were to look at the yield limiting factors in corn, it’s really not about input. What it’s about. really, is hybrid selection more than anything and as you’ll see in a little bit, hybrid selection is really what dictates our management style as we go through any production season. Really, once we pick a hybrid and kind of decide on the management style that we want to have, the main objective then is to reduce the amount of stress on corn during the growing season. And so that becomes the question then becomes just how do we do that? Well, as I mentioned, we’re kind of back to the future in terms of the prices that are projected versus the production costs that we’ve got out there. The yields are very good- have been very good -the last few years But, of course, the corn price has gone down quite a bit and really where everything needs to start is you need to know your costs and we’re going to talk a little bit about that as we go through the presentation. Then what I always say as well is concentrate on the basics just the basics of corn production and really a lot of the decisions you make comes down to timing and what to do when and where and then finally every decision that you make you really need to ask yourself: Why are you doing this particular operation or why are you making this kind of decision? Many decisions often times especially as we start to look at extra inputs really may be difficult to have a return on investment down the road. First of all, the cost of production for corn. This slide here shows the USDA estimates for the Northern Crescent area which Wisconsin is a part of of the great lakes and you can see that there have been a number of costs that have really increased dramatically and one, of course, is seed. Used to be around twenty dollars an acre.n Now we’re up to well over a hundred dollars an acre for seed. Another one is fertilizer; that has really increased over time. Finally equipment and land costs have also been fairly big movers in terms of the cost of production for corn. Some things that really haven’t changed very much though are chemicals. The overhead associated with any production usually we figure about fifteen to twenty percent overhead. This would be things like tools in your shop, plowing the driveway, anything that needs to be run for the business to run is considered overhead, and then finally the labor really hasn’t changed all that much in terms of the cost per hour over time. This is what we see for Wisconsin, this next slide here shows what is going on in the corn belt: the Iowa, Illinois, Indiana, Nebraska parts of the country and you can see that in general the cost of production is, as far as the trends, have been very similar. However, there are higher land costs, equipment seems to be a little bit higher as well too, and that’s really the difference between what we see in Wisconsin versus other parts of the corn belt; there are slight differences out there. Now, when we think about different decisions, we kind of categorize these into three different types of decisions and really the success of those decisions is going to be dependent upon weather, the timing that you’re able to do some of those operations, as well as the economics. These are all going to drive the success of those decisions. One group of decisions is what I just call categorical. You either do it or you don’t. You either rotate corn or on the Soybean ground or you grow continuous corn. You either do no till or you do you do some chisel plowing or more aggressive kinds of tillage. These are all examples of categorical types of decision variables. Another type is something called continuous variables where the amount of the input is really, there’s quite a range in terms of the amount of the input that’s required for that decision. For example: plant density. We know that in some parts of the state we can go down as low as 26,000 plants to the acre and still have a fairly good yield. In other parts of the state, it’s higher than that. So these are these are the kind of decision that is kind of along a continuum. And then there’s something that I just call optional variables. These are things that aren’t really needed oftentimes to be successful at growing corn, but oftentimes they help with some of the decisions a little bit. I want to show you just an example here of what happens with continuous variables or one example here of continuous variables and how to think about this a little bit. This slide here, what we’re going to do, is look at the Maximum Yield versus the Economic Yield and we’re going to use plant population as the input here. Generally, as we increase our plant population we get to an optimum and then as you go higher than that optimum, yield oftentimes will decrease. Now when you look at the cost of that particular input, that cost is pretty much a linear increase. In other words, as you increase for every thousand seeds that you put out there per acre, that’s going to be pretty much a linear kind of an input into the into that production. Now the top of the Yield curve is where we where we achieve our Maximum Yield and this is point A here and this can slide a little bit along that yield continuum there, but that’s one point on this curve that we’re really interested in and you should know this really for every field. You should know what population gives you your maximum yield on a high ridge top versus something that’s more, you know, in a lower part of the farm. And this varies probably from field to field. The important point here though is the economic optimum and usually [that] economic optimum is lower than where that Maximum yield occurs and what we’re really looking at here is the distance between this green curve and where the cost is right here and whenever that’s As far as it can be as wide as it can be that gives us our economic optimum There’s two other points to kind of pay attention here about one is what we call the equilibrium yield where the Cost of the input basically equals the cost of the yield that you get and with corn where we’re never really getting there we we in our program will test up to 120,000 plans to the acre and We still can get some fairly High Yields at that high of a population, but obviously the cost the input cost is going up quite a bit, and then one other point is what’s happening down at the origin or the The origin of the ground and this is the yield with no input now with plant density If you have zero plants out there you’ve really got here yield but there are some inputs like nitrogen for example Where are you can put zero nitrogen out there and yet you’ll still get that yield curve intercepting at a higher rate and sometimes 50 to 70 50 to 70 bushels is what can be produced with real nitrogen. I’ll show you an example Just a little bit and then when we talk about some of these categorical Types of decisions really what we’re talking about is it’s just a small change that goes on Between where that Maximum yield and where the economic optimum is so for example the tillage? With no-till and all the trials that we’ve done we only see about a seven percent yield decrease from where the Maximum yield occurs with chisel plow Okay, so this is kind of the example of where these categorical decisions come in a little bit, but this gives you an idea of how to think about some of these different decisions, especially for a continuous [variable] What I’d like to do here is go through a number of decisions I’m going to just go [through] [10] year going 8 into fairly detail And I’m gonna start with the number one driver of course is weather In the midwest here were challenged by wet Springs, and this is a case where? Drainage is very critical and we’re seeing a lot [of] fields getting drained more and more in Wisconsin That’s in the spring in a summer were often times challenge with dry and hot conditions during pollination and especially during grain filling during the late late august and late july and early part of august I always think that you got to know what to pray for and Here’s ideally what we need for corn to do well? In the spring you need dry enough weather for early planting But it’s got to be wet enough to be able to activate herbicides in order to get [good] stands and uniform immersions Actually a mini drought in the month of June is not a bad thing But beginning about that third week of June first week of july We need to be getting timely rains and one inch per week is is generally? What’s needed for the corn crop at that time and then in the fall hot sunny dry weather? Helps to speed up that harvest and get that corn down the tWenty-two percent moisture so that we can now stork During the season, so this is what you need to be praying for as far as the weather goes and corn production but ultimately we really have to accept the fact that mother nature has the upper hand here and Them and and keep that in mind and oftentimes what we’re doing is reacting to what mother nature gives us this slide here gives you a sense of what goes on when We really don’t have a lot [of] inputs these are the state [of] here is some data from lancaster where there’s been zero nitrogen Applied since nineteen sixty sticks and This first line said a lot line that I’m going to show you here is continuous corn and you can see that just putting seed [out] there and Planting and keep it keeping the weeds fairly well controlled we can get anywhere from about 50 to 100 bushels per acre of green With really no inputs at all Okay, now when we rotate corn. I’m Exploiting ground them again apply 0 nitrogen to that to that corn ground We can increase our Yields due to that rotation effect okay, and we increase those Yields about 50 bushels or so over [that] a continuous corn and Then finally if we can even have a more extended rotation oftentimes, we’ll see and even more added benefit This is this is corn basically following alfalfa But it’s in a longer kind of a rotation and again zero nitrogen applied to any of these plots in any phase or any year With this data and you can see [that] in some years We’re getting up around recently up around 200 bushels to the acre with really no nitrogen input Into this into this into this set applause Okay, so that’s kind of the effect of weather and kind of range that we can see now another decision is selecting your corn hybrids and Increasingly the hybrid that we pick is dictating the management style that we’ve got that we can have out there What this transgenic were these transgenic lines that we have? There’s a lot of different options that grow ourselves that influence for example pest Control down the road in terms of weeds or insects. We now are starting to see some of the drought card technologies come out But selecting this hybrid is a very important Decision. I always We’ve always encouraged [four] years at University agronomists have encouraged using independent Yield trial in a multi-location Average our hybrid trial books provide that sort of information for you, but there are other places as well things like the first group La pack also provides a overall multi-location average Then we say evaluate the consistency of performance if the hybrid ever falls down in any trial Try to find out why it tails an act in that trial, but by choosing just multi-location averages Good multi-location averages you can you can expect to make good progress? Over time with hybrids that perform that way in the transgenic, era though, we’ve had to add. I think three other principles if you will first of all every hybrids got to stand on its own for Performance and what we mean [by] that is you just can’t switch out Different transgenic technologies into family backgrounds there are interactions of these different technologies or traits that interact with the underlying germ plasm and we’ll see 20 to 30 bushel swings all in with hybrids from the same family and this we feel is significant and every hybrids gotta that got to stand on its own if you buy a Double-stack hybrid and get delivered a triple stack hybrid that may not be a good deal for you Even though that triple stack that third trade is free If it’s a poor performer You might actually go backwards a little bit finally pay attention to feed costs Well, what I typically? See is that if you have a difference of 50 to 75 dollars a bag between one hybrid and another hybrid. It’s very difficult to justify paying for that more expensive hybrid this is a big departure from what extension agronomists have done [and] Recommend in the past. We always would recommend going with a bed of the former if Even though it makes a little bit more expensive and finally by the traits you need not all hybrids We don’t need all the traits that some of these hybrids come work for example in Northern, Wisconsin We oftentimes don’t need the corn rootworm trade for example up in the north Finally keep this in mind that traits. Do not add to yale, what traits do is they protect yield and and this is important as we as we wrestle with these with hybrid selection holidays I Put this flight out just to give you a sense of what the economics are of this decision We’ve the public program at the university of Wisconsin started in 1973 we’ve conducted 886 early in Late Trial since that time the average yield across all those trials is honored 65 bushels and the difference [between] the top hybrid and the bottom hybrid in the trial is 71 bushels to the acre now even if that was only half let’s just say it’s 35 bushels to the acre. That’s a big Economic swing when you’re basing that decision really at your kitchen table in the wintertime Picking this hybrid is a very important aspect to profitability for corn and Again, this is just just a typical range that will see among the hybrids that we are commercially testing I Wanted to spend just a little bit of time on What’s happening with conventional hybrids within our trials? this slide here shows kind of the time along the bottom here, and then this this axis here is the performance of conventional Hybrids in Relation to the Trial average Trial average sits right along here. We would expect any group of hybrids whether this may be smart stacks or Or bt. Corn Borer Traded products or conventional hybrids to fall right on this line here. That’s what we would expect Okay, and when we look at the performance of conventional hybrids for a lot of years that’s where they that’s where they were falling out but beginning about 2000 2001 or so the conventional Hybrid started Yielding below the trial average This little bar here means that if it touches this line here But it’s not statistically different from the trial average and you can see for a lot of years The conventional Hybrids were below the trial average when you look at all the hybrids beginning about 2009 2010 those conventional hybrid started coming [back] again a little bit they drop down in love 2011-2012 back again for three years and then in 2016 last year they drop down again a little bit So we’ve seen this kind of decrease go on when we look at all the hybrids in a trial But really some from your perspective. There’s a farmer Really you don’t care about all the hybrids what you care about is what’s going on that top group? So light discard the bottom eighty percent of the hybrids and just look at what’s going on with the top 20% We calculate a mean and if that technology is not in that top 20% group take the best best Technology A best conventional hybrid in this case and put it in there. This is what this is what it looks like we In that top group we will oftentimes have especially more recently conventional Hybrids performing As good as the trial average among that top among those top 20% But again, you can see for a lot of years it kind of fell off it got as bad as being almost 20 18 to 20 bushels below the trial average, but again more recently these conventional hybrids are back they’re doing well and We seem like we’re back onto the yield [March] when it comes to conventional hybrids But just something to think about as you as you pick your hybrid that’s coming for this coming season one of the other things I like to encourage you to Spend a little bit of time evaluating are the few treatments that go on to corn first of all we always need a fungicide Whenever we don’t have a fungicide on corn see well. We will see anywhere from tWenty-five to Thirty percent death of Corn and fungicides in Wisconsin are very important to have on the seed But there are a lot of other products that are coming on as well two things like the meta sides or the meta stats micronutrients insecticides all these are also being applied to the seed and the Results sometimes are kind of mixed that the trouble that we have with this is that We can’t predict very well what kind of problems you’re going to have in the spring for example the z Cormega is it an insect that oftentimes only has a flare-up of population in appealed every seven years or so and It’s really [hard] to predict when that’s going to occur So oftentimes growers now are putting on a front side and an insecticide And at the point. I’m trying to drive home here. Is that this is important the difficult decision to make? But you need to be doing [something] out there when it comes to protecting that seed Coming protecting that investment the coming year and now what we want to do is get that corn seed off to a good start in terms of Early Spring Growth A fourth Decision is just involve with crop rotation now. This is from a profitability standpoint typically This is probably the [easiest] yield you can get and I call it a gift that keeps on giving If you’re rotating corn you can expect to see on a Soybean ground or wheat grown? You can expect to see attend the nineteen percent yield increase With this kind of a decision this rotation will last at most two years and it really depends on the length of the break between in the in the off corn years for example if we only have a one year Soybean break for example that second year of corn doesn’t yield As much, it yields basically the same as continuous corn in another series of plots So this is again something very important this rotation effect laughs At most two years but it’s even more dramatic when we have a stressful year The drought of 2012 was an example where anything that was rotated? typically was able to get through that stress period Until the rains came on july, eighteenth and And those cloths did did very well in that particular year? This is what we see with this though Here we’ve got first year corn following five years of beans over here is the Corn-Soybean rotation? Then we got the second year of continuous corn third year 40 or 50 or continuous corn Then we’ve got here continuous corn that’s been grown since 1983 So this is data up to 2015 so it’s almost 30 years a continuous corn on these blobs here and you can see that the rotation effect really is very similar when you locate corn and beans and When you rotate that first year of corn following five years of beans? The second year we still see a response is the second year corn is higher yielding in the third year corn but by that third year you’re basically a continuous corn yield levels of corn that has been in place for over 30 years or so and This is what we call the rotation effect, and it’s most dramatic in that [first] and second year Following either corn or wheat or especially alfalfa? These next bars here are the response that we see with? conventional till in no-till and I’m going to come back [to] this a little bit, but but The the increase that we see in this trial is about eight percent Or a bushels per acre with continuous which is allowed their conventional tillage the Yields [two] [hundred] [four] bushels and then over 30 years of No-till we’ve seen above in a bushel decreased with no-till So it’s a relatively small change, but again It’s kind of like these categorical chant decisions that that you need to do do it or you don’t Of course the expense of doing conventional tillage is It’s probably going to make this no-till a lot more up economically optimum Okay, a fifth decision is planning date And this is what sets up your season being ready to go so that when the 50 field conditions want Is important? For getting that crop off to a good start if you’re late here oftentimes the economics of this Ar is that you lower your yield and then in the fall of the year you also end up with higher moisture often? and so you get a double whammy if you will of Lower Yields as well as at higher drying costs in the spring of the year now if you go too early or too late well again You really? Need to just look at the field conditions that are there What we see is that April 20 after april twentieth in the south the field conditions warrant don’t worry about soil temperature just go And [that] magic date in the Northern part of the state is around april Thirtieth or sold This is some data that kind of shows this here We call the maximum Grain Yield here for april twenty-eighth. This is at Arlington But this is a number of years of Data. This is about 11 12 years of Data here well, we planted as early as as march in some years and But typically will see that maximum yield occurring right around may first on this data set here It’s about April twenty-eighth. We’re still at with it. We’re still within ninety five percent of our Maximum Yield As far out as about may tenth or sold but after [that] we really start to Lose yield and it’s an accelerating rate We’re only losing about a half a bushel out here, but by the end of may in the beginning part of June We’re losing two to three bushels an acre As we get into that Into those late-May early-june planting dates, so this is again something that sets up your season it it can affect you in the fall of the year as well, and Again, it’s important One of the things too is the risk that’s associated with this It you know when you plant in here There isn’t there’s as much risk planting april fifteenth, or April Twentieth Is there is may first or may tenth the Risky part of corn production is when we get into these may and June playmates? We’ll see more risk associated with those planting dates than we do early on and that’s because of what goes on the fall year in the killing frost Associated with with some of these later planting dates Okay, another thing and I’m not going to go into this very much depth. I know Kerry and others are going to talk about this But I do I do want to say a few things about soil fertility in relation to corn this is not. Where you cut costs Okay corn is especially nitrogen loving and You want to make sure that you have added with fertility out there when it comes to soil fertility and corn production Follow extension recommendations. We’ve done a number of trials where we have put on a lot of fertility and Really the university of recommendations. Give us. Just as good a yield as some of these plots that have got extra fertility on them Soil testing is always important and where you can apply The cheapest form of Nutrients usually is good enough And again, I won’t use a lot of micronutrients unless the soil test recommended, but these are just general recommendations I’m and adult carry is going to go into more depth with this in her part of the presentations Another decision is what I just call planck distribution In the field this is really a function of three different things planned density the the row spacing that you’ve got and in general with corn narrow was narrower better, but corn is still a Row spacing kind of a crop it will perform just about as well at 30 inches as 20 inches You do gain a little bit. It’s around three to three-and-a-half percent or so but in general if you had 30 inches that’s Probably it will certainly be better than 36 or 38 inches and then plant that seed about one and a half to two inches I’m going to spend a little bit of time on this plant density thing our decision And it it kind of comes down to this in terms of playing density it really comes down to what you want to use that corn for If we look at a number of trials, this is 10 years [of] work At Arlington here, and so this is for one farm and if we graph this out what we’ll see. Is that the the Maximum Yield for grain is right around 39 thousand plants to the acre okay, but when we calculate the seed costs that are associated with it and look at the economics the great the economic optimum performed in cities around 35,000 plants for the acres so we’ve dropped about 34,000 plants to the acre for when we look at the economics Now if you this is put this probably varies by field in other words a ridgetop or Sandy field is going to be different than a Low spot valleyfield on a farmer or Heavier Clay Loam type of the soil so it’s important to know where you? Maximize your yield and what plant density you maximize your yield once you know that then you would back off about four to five thousand plants to the acre typically to get at that economic optimum Yield okay, and as I said it varies a little bit by the use you’re going to have a purse eyelid your forage we see the Maximum Yield at about 48,000 plants to the acre Milk per ton though has maximized at the lowest plant population or in this case here about 18,000 plants of the acre And when you combine the two your milk per acre and this example is maxed out at about Forty [five] thousand plants to the acre Ok so again depending on your use and how you’re going to use that corn silage you would probably? Be looking at adjusting that plant density a little bit now one of the [things] to keep in mind here though is that We are within ninety five percent of that Maximum Yield at a fairly wide range of populations For example the economic optimum for graying we can be at that [ninety-five], we can deal with in ninety-five percent of that yield at about 25 to 26 thousand plants to the acre For forage yield we can be there at about 32,000 plants for the acre, so this is a very broad shouldered response that we see with plant density and All I’ve given you here is kind of where the maximum the economic is but we if we want to be within five percent of that maximum we can be there even You know somewhere between 25 and 30 thousand plants of the acre for a lot of these different? different uses and decisions here so something to think about okay on eight Decision pest control again I’m not going to go onto a lot of detail here because there will be others that will talk about this in More depth I just want to from where I said Give a perspective of what I look for in in some of these skills first of all in corn at least weeds are much more difficult to control than insects and Insects are much more difficult to control the diseases in corn we have a lot of breeding effort that goes into developing resistance to diseases and and that has that helps and so when we talk about applying a fungicide oftentimes I get kind of skeptical because the we can oftentimes Control a lot of those diseases just by the hybrid that we select or pick in a kitchen table in the wintertime Okay, now when you look at Soybeans diseases are much more important than this order might be very different when we want you as you go around crops, but the corn our main issue is really with weeds and Scouting and timeliness are key here being timely with your with your herbicide applications, or we control is very important especially early in the growing season and I just can’t have to emphasize that enough There is an again this will be gone into by others a lot more, but keep in mind the economic injury level The Economic threshold levels that are out There and again these are just some of the principles that are involved as you start to deal with pests that are out There you may or may not have insect and diseases next year You’re more than likely are going to have weeds So knowing what those thresholds are and having good weed control early will be will be a benefit number Nine Tillage This is one of those decisions. I think that you could really save a lot of money However, I would not resist the urge to throw away your chisel plow The economic swing that the data that I’ve seen is somewhere between 40 to 100 fifty dollars an acre Depending on how you prepare that field and the kind of till is that you use in that field? We used to think about tillage in terms of controlling weeds and secret seedbed preparation But really now. It’s only about Getting that seed bed ready to do to a step for forest and establishment We do have more and more issues coming on now with compaction But we have a lot of tools available to us now That are that we can use to get good stands in relatively Little tillage Especially when we rotate on the corn ground So what I typically say is that tillage is really not necessary Except when they get into continuous corn and then you may want to pull out your chisel plow a little bit But the response we’re talking about is relatively small you saw the eight bushel increase in One experiment if we average out all of our Studies what we’re looking at is about a five to seven percent yield fling depending on whether you do tillage, or don’t do tillage That’s pretty small really when you look at some of the other decisions that have to be made out there And this is this is a data and this is the example that I want to show here with this You’ve already seen this Yield response that goes on with with corner and location so in other words when you grow corn in the corn Soybean location the Yields are basically the same as That first year corn following five years of beads You’ll go down the second year and the third year as well and basically by that their year you’re at continuous corn Yield levels But look what happens when you add the tillage variable This is kisses conventional tail right here when we do the same sort of plots with no-till Typically what we’ll see. Is that no till there’s really no difference at all between no-till and conventional kills when we’re early in that rotation but as we grow more and more continuous corn that becomes the That’s really when we start to probably do more conventional tillage we take about a 13 yield bushel yield hit in that second year of corn in about a What is that about a? 27 Bushel or 17 Bushel Yield it in the in the third year [of] corn and it pretty much stayed the same the rest of the way through but What’s interesting is what’s happening in these early years here if you’re rotating corn you really don’t need to do tillage It’s only as you go deeper into continuous corn rotation that you need to do some tillage to bring Those yields back But you never really overcome the rotation effect even even with even with tillage so something to keep in mind is what we call the rotation by tillage interaction and Again if you’re rotating you don’t need to do tillage, and you can save yourself 42 140 150 dollars an acre With what’s not having to do those tillage operations? Finally the last point I’d like to make is harvest and store carefully There is a trade-off that occurs with harvesting we recommend the drug But what are you harvest the more drying coughs you have the dryer you harvest the more ear loss you have in shattering Nickels We typically recommend harvesting between 20 and 25 percent moisture you need to dry down corn typically for safe storage? For a long period of time and that needs to be below fifteen percent But most of that drying typically is occurring in October and november Really by the middle of this December there isn’t a lot more drying that goes on Until we get out to the spring of the year then we get a little bit more drawing that that can occur But a lot of that drawing is pretty much done By the time we hit Really the middle of November and and yet, I still see a lot of fields out that haven’t been harvested yet and now those growers are taking on a lot of risk in terms of the video in terms of Potential Yield loss that can occur so it kind of wrap up and summarized here this slide here kind of gives you a sense of the Yield swings that can go on Just with some of these different decisions with hybrid it’s about as e row to thirty percent change, but Seventy bushel Yield swing Depending on the kind of traits you got on there that can add up to a zero to one hundred percent Yield swing Just depending on the hybrid that you pick Tests are also kind of like that If you don’t control weeds or you you insects come in you can have up to one hundred percent Yield swing based on the kind of Yield on [the] kind of damage that you have planned density We see between a full stand and a half stand about a twenty two percent yield fling with rotation It’s up there to thirty percent depending on the kind of environments you got planning Data 20 to 30 percent swing in terms of Yield Sold fertility is about twenty to fifty percent Tillage is one of those small things around Five to seven percent is typically what we’ll see, but again It’s not as big as some of these other decisions and another one is row spacing on average is about three percent But there really isn’t a lot of yield swing that goes on with that particular decision so again these are some things to think about it kind of comes back to the basics when we have these low Margin years and and Making sure that that what you’re doing out. There is done in a timely manner and in The best in using the best information that you can so that I’ll stop we have a number of different Things that we do during the season the kite help Inform people what we see in our plots that are scattered around the state and if you want to follow us please do so at ease on different sites you can also subscribe to our website and then also point out the Type of performance trial data that lives up that was up all this just past year some of that. Thank you for listening and Good luck in 2017 so

Leave a Reply

Your email address will not be published. Required fields are marked *