Last year, the concern was growers farming cotton for insurance. This year, it appears dryland corn has taken cotton's place. And what has many farmers on edge isn't the possible insurance payouts but the potential for aflatoxin.
Delta Farm Press has recently fielded calls from Arkansas farmers concerned about “insurance dryland corn.” The fear these farmers cite is that their irrigated corn crops will pay a heavy price if aflatoxin shows up in dryland corn.
“Some farmers around here have bought dryland corn insurance. I'm not sure who or what the signee numbers are,” said an Extension agent in east Arkansas.
“There's a lot of dryland corn planted in the United States, just not a lot in the South. The program is available. Farmers are in dire straits, markets aren't looking too spiffy, and this program may offer some kind of help. Everything is bleak in the ag world, and you can understand why some farmers are taking the insurance,” said the agent.
Steve Rodery, an Extension agent in Crittenden County, Ark., says his area hasn't had a lot of dryland corn lately. “But in the early 1990s, we had some guys growing it and getting 110 to 120-plus bushel crops. It is risky, though, and the threat of aflatoxin is certainly higher if you aren't irrigating. That's a concern and once it's known that affected corn is coming out of a certain area, the situation snowballs.”
The Arkansas Extension system doesn't recommend growing dryland corn, says William Johnson, Arkansas Extension corn specialist.
“If you look at budgets, I'm sure you can certainly cut expenses drastically by growing corn dryland. Theoretically, you can plant some Roundup Ready corn, spray it once and call it a day. But that just isn't a good idea.
“In 1998, what dryland corn we had was totally destroyed by aflatoxin. In turn, that destroyed the marketing capacity of all the irrigated corn. Once aflatoxin is found, it's just assumed that the entire corn crop in an area, regardless of how it was grown, is tainted.
“In 1998, a lot of people who got into corn production didn't understand the implications of aflatoxin. We kept telling farmers that aflatoxin was serious and potentially devastating,” says Johnson.
If a grower plants good, Southern hybrids — hybrids that have good ear tip coverage — that he manages well, then aflatoxin is a minor problem, says Johnson. But if a grower plants corn dryland and doesn't manage it intensively, the crop is “infinitely” more likely to fail.
“Corn is like a pretty girl: if you don't take care of her, she'll leave you,” says Johnson.
Insurance farming isn't as big a deal when you're talking about soybeans or cotton, says Johnson.
“Farmers who aren't just after insurance may get upset, but they know it's not going to affect them — at least short term. But when it comes to corn, if you have a crop that's aflatoxin-tainted, the radar goes up at the elevators and everyone gets sucked in.
“I've gotten calls from farmers worried about this. They're not really worried about neighboring farmers getting insurance money. They're worried about what this means for their crops' marketing potential.”
How much dryland corn is going in? Johnson is hearing everything from just a few fields of corn to thousands and thousands of acres.
“I certainly hope it's on just a few acres. What's good about this is it's made some people think about the possibilities. Hopefully this will head off any problems. We don't want to get to the place where no one will take Arkansas or Delta corn.
“I speak with Arkansas farmers regularly who tell me how corn has helped keep them in business. I hear that all the time. We don't want that to go away,” says Johnson.
A Delta-based economist says there are solid reasons to keep an eye on the situation. “If you give the buyers a justification to hammer prices, they'll take it. The farmers planning to grow a legitimate crop could have a legitimate beef here. We'll have to wait and see,” says the economist.