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Corn+Soybean Digest

Long Rides Bag Higher Prices

Texas grower Ralph Diller probably has a sorer behind than most tractor drivers. Fifteen trips over a field to make a corn or bean crop can wear out a seat - both the farmer's and the tractor's. But for strong premiums on corn and soybeans, Diller doesn't mind those long rides in his organic production program.

Diller, who farms outside Hereford in the Texas Panhandle, is one of few growers who is 100% organic. No herbicides, insecticides or chemical fertilizer; just lots of cultivating, good bugs and feedyard manure. One might call him an unconventional grower who is totally conventional.

His input costs are about the same as those of a grower using a balanced integrated pest management program combining chemicals with beneficial insects to control bad bugs along with chemical fertilizers and herbicides. But, in the end, the price he receives more than covers the extra time he spends in the tractor seat.

Diller contracts the majority of his production with Arrowhead Mills in Hereford. "My corn price is about 11/2 times December futures when I set the price," says Diller, a veteran of over 15 years of organic production. His white corn contract is even stronger, at 13/4 times the futures price, and his soybean price is stronger still - up to three times that of November bean futures. In 1999, his irrigated corn yields were in the 150-to 175-bu range on about 250 acres. His 120 acres of irrigated beans yielded about 60 bu/acre.

"High-quality organic beans are difficult to come by," says Dale Hollingsworth, who contracts with growers for Arrowhead, a subsidiary of the Hain Food Group of New York. "That's why our premium for beans is usually higher."

Arrowhead has been in the organic foods business since the 1960s. Its organic product list tops 100. White, yellow and blue corn are either sold whole, as meal, or in cereal blends or chips to health food stores and major supermarket chains. The same goes for organic soybeans, which also go into soy beverage. Growers have until November of the production year to lock in a price.

Even though organics aren't even a drop in the bucket of overall food production, more and more consumers want food produced chemical-free. Arrowhead supplies part of that demand by contracting with a handful of organic growers like Diller.

"We use about 3 million pounds (about 55,000 bu) of yellow corn and 1.6 million pounds of white corn a year," says Hollingsworth. "We receive that production from only five or six growers." About 10 growers furnish blue corn for Arrowhead's 5-million-pound demand.

The company buys about 800,000 lbs of soybeans annually from four growers. Diller is one of them. His organic rotation also includes wheat and several other minor products. "All of my 1,120 acres are certified organic by the Texas Department of Agriculture," says Diller, who hasn't sprayed for insect control since 1978.

Most growers couldn't or wouldn't go 100% organic. In most situations, land must have been chemical-free for three years before a crop can be tagged certified organic. Fertilization must come from livestock manure or natural soil nutrients. Weed control comes from tillage. Insects are controlled by beneficials.

Diller usually plants corn after winter wheat. In late March or early April, he preirrigates and takes soil samples. Fields normally require 1-2 tons/acre of composted feedyard manure that's tilled into the soil. He then plants food-grade corn hybrids at about 26,000 seeds/acre.

He must stay on top of weed control. He typically rotary hoes five times and cultivates four times.

"It's 1950s farming," he says. "I've been known to cultivate when corn is shoulder high if we've had any hail that knocks down the canopy."

Insect invasions make him antsy. "Sometimes it's tough to watch a field that has a potential bug problem," says Diller. "But there are usually enough beneficials to prevent severe damage. And while other growers often face spider mite problems, I don't have any."

Except for never having been touched by chemicals, the specs for delivery of organic corn are similar to those for white or yellow food corn. Maximum moisture content is 17%. Test weight must be 50 lbs/bu or higher. Yellow and white corn must fit through a 1/4" screen. Aflatoxin levels can't exceed two parts per billion.

"Even if your production is 100% organic, if it doesn't meet these specs it can be turned down and then go on the cash market," says Diller. He adds that growers should examine the credibility of organic buyers before making deliveries because "there have been some unscrupulous operators in the past."

Diller also plants organic alfalfa to harbor beneficials. "My costs vs. chemical farmers' costs are tractors and machinery vs. chemicals," he says. "I see it as a hidden benefit. Once the crop is produced, chemicals are gone. My machinery is still here."

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