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Corn farmers could cut acres, push to make every one count

U.S. farmers could plant fewer acres of corn than in 2007 but more acres than analysts are expecting them to put in the ground in 2008, the president of the National Corn Growers Association said.

Ron Litterer, NCGA president and a corn, soybean and hog farmer from Greene, Iowa, participated in a panel featuring the three presidents of the commodity organizations that came together for this year's Commodity Classic in Nashville, Tenn.

Members of all three groups — the National Corn Growers, the American Soybean Association and the National Association of Wheat Growers — were walking around the Opryland Hotel with big smiles on their faces because of the record and near-record prices being offered for their crops this winter.

With the markets for all three crops trying to compete for acres, opinions are divided over how high prices could go and where the final acreage for each could fall when the dust settles this spring.

“We're looking at 87 million to 90 million acres of corn,” said Litterer. “We'll see. On March 31, we'll have a better idea of where the acreage could be.” (March 31 is the date USDA releases its 2008 planting intentions report. Analysts have been saying corn could drop to 84 million to 85 million acres.)

U.S. farmers planted nearly 94 million acres of corn in 2007, a 16-million-acre increase over 2006, due, in part, to corn prices being driven up by demand for corn-based ethanol. Many analysts thought corn prices would soften because of the 19-percent jump in corn acres, but the opposite has happened.

The conflicting numbers have had many analysts checking their crystal balls to see if they need re-tuning.

“We've had trouble predicting the future,” said John Phipps of U.S. Farm Report, who moderated the panel discussion. “Nobody would have believed me if I had said at this meeting last year that by this time in 2008 corn would be pushing $6, soybeans would be at $15 and nobody really knows what the price of wheat is. Do you know what it is?”

Phipps directed the latter to John Thaemert, president of the National Association of Wheat Growers and a wheat farmer in rural Kansas. Winter wheat futures have been trading at $10 per bushel but spring wheat futures briefly touched $25 a bushel on the Minneapolis Grain Exchange the week of Commodity Classic.

“These are difficult times,” said Thaemert, who works as a banker when he's not growing wheat. “We have seen some tremendous price swings, which means it's really a time for risk management.

“But you know we have prided ourselves and talk the talk that we are the world's provider of grain,” he noted. “We say we are the best producers in the world and that we're going to be there. We have to continue to maintain that reputation.”

While prices will be a factor, Litterer says he believes many farmers will be looking at a broader picture when they make planting decisions this spring.

“I think most farmers know their bottom line and can compare what's going to be most profitable on their farm,” he said. “I think with the numbers we're looking at there's going to be a lot of corn planted this year and a few more acres of soybeans and a few more acres of wheat.”

With the tight supplies of all three commodities — and the growing din of criticism that farmers are driving food costs up with the high prices they're receiving for corn, soybeans and wheat — growers will have to step up their production, the presidents of the three groups said.

“We will need to grow more bushels of wheat on every acre, more bushels of corn, more bushels of soybeans on every acre we grow,” said John Hoffman, president of the American Soybean Association. “I think farmers are simply going to have to more intensively manage to strive to get every bushel out of every acre.”

Thaemert and Hoffman, a soybean and corn farmer from Waterloo, Iowa, both said they believe biotechnology could be key to increasing their members' productivity.

“Wheat has lagged a little bit with biotechnology,” said Thaemert. “But that's not as much of an issue anymore. A lot of the resistance to biotechnology is beginning to change as people see the advantages.”

“You can sum it up in one word: biotechnology,” said Hoffman. “ASA has made a lot of trips to the European Union to get regulatory approval for biotechnology crops. What's really starting to drive some of the change are the prices they're having to pay for grains and oilseeds.”

The three presidents talked about other issues, such as getting more young people into farming, given the current outlook for commodity prices.

“If you have a family member who really has a passion for farming, I think you should look at it,” said the National Corn Growers Association's Litterer. “They just have to make a decision that they're going to do what it takes to make it work.”

“In many areas, though, it's going to be difficult for young people to get into farming,” said Hoffman. “They're going to have to have a family member, a neighbor, a mentor that's going to help them along the way. These are times of opportunities but we had better manage wisely.”

“Risk management will be the key,” said Thaemert. “I think all three of us have been through tough times — we remember what happened in the 1980s. That's a message that I give younger people who are looking to agriculture. These prices aren't going to last forever. By the same token, things are not always going to be bad, either.”

Litterer was asked about resistance from livestock producers to the higher corn prices producers have been enjoying.

“I'm a hog farmer so I know firsthand what the livestock industry is going through,” he said. “We're heavily invested in it so we know it's one of those things we're going to have to work through.

“Unfortunately, the hog industry has been hit with two or three things at the same time where some of the other livestock sectors haven't. Admittedly, they're going through some tough times, but I think it's going to turn around, and we will recover in that sector.”

Asked for closing comments, Litterer drew a good laugh from the audience. “Plant corn,” he said.

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