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Corn+Soybean Digest

Westward Bound

Driving towards the western sky, an hour outside Fargo is wheat country, barley country and sunflower country. But increasingly, the golden glow of a small grain landscape is giving way to the green tint of corn as more and more producers are shifting acres out of wheat and into corn-soybean rotations.

“When wheat scab hit in 1993, it was time to look for something else,” says Jeff Enger, who farms 6,000 acres with his brother and sons in Barnes County. In 1993, the Engers grew just 300 acres of corn. “Today, we grow 2,200 acres,” Jeff says. Adds neighbor Kent Sortland, “We grew 400 acres of corn this year and will double that next year.”

These producers are getting up to 150 bu./acre of corn. That may not be exciting to Iowa and Illinois producers, they acknowledge, but pretty darn impressive in a state that until recently had a hard time getting yields above 60 bu./acre.

More than doubling yields in less than a decade illustrates the importance of new hybrids that have allowed growers in the state to overcome historical corn handicaps.

In some counties, acreage has quadrupled. The Engers are on the cutting edge of the shift — Jeff is on the North Dakota Corn Utilization Board — but the movement to corn is massive.

Barnes County corn acres have more than quadrupled since 1997, from 15,000 acres planted to 50,000 in 2003. Statewide, it's the same story — from the 10-year period 1995-2005, North Dakota corn acreage increased from just 750,000 acres to 1.5 million, a 100% increase, while U.S. corn acreage over the period increased just under 11%.

North Dakota soybean acreage has posted an even more pronounced upward spiral, from 640,000 acres to 3.25 million over the same 10-year period.

It's an impressive shift, but more acres would be converted to corn and soybeans were it not for North Dakota's “wheat consciousness.” That's the belief — erroneous, in Enger's view — that if you live in North Dakota you must grow wheat. Because of that, younger producers open to new ideas are first shifting from small grains to corn and soybeans, he says.

What's nothing short of amazing about the shift to corn in North Dakota is that places like Barnes County, where the Engers farm, get no more than 18 in. of rain per year — barely more than half of what Iowa and Illinois typically get.

What's more, corn acreage is even growing in extreme western North Dakota and South Dakota, areas where annual rainfall in some places barely hits double digits.

To succeed in North Dakota, producers have to be resourceful in their battle against two huge variables: low rainfall and cold. They are only able to do that because of new short-season hybrids with almost double the yields of older hybrids, producers say.

These new hybrids are an important part of the shift in the corn and soybean story. But the reason why they became available gets down to politics: the 1996 Freedom to Farm bill.

That piece of farm legislation, for the first time since the price support program was created decades ago, decoupled governmental payments from a farmer's historical crop base. In other words, farmers could plant what was most profitable without the risk of losing farm payments.

Without this policy shift, North Dakota's acreage would have stayed in wheat. It would have been financial suicide to shift wheat acres without Freedom to Farm, says Mike Clemens, another Barnes County producer, and president of the North Dakota Corn Growers Association.

Farm policy spurred the development of new hybrids that led the way to profitable corn growing in North Dakota. But several other key factors also came together that motivated producers to make the switch.

Most importantly is fusarium head blight, or rust, that started hitting wheat in the 1990s. Elevators began deducting a percentage of producers' price per bushel, and at the same time wheat prices tumbled. In addition, producers were forced to apply fungicides on their wheat and barley, increasing costs.

North Dakota State University agronomist Joel Ransom says scab has hit the eastern part of the state, but not western North Dakota. Thus, the primary motivation behind the switch to corn in eastern North Dakota has been to find an alternative to small grains affected by scab. At the same time, motivation among western producers has been to seek out a crop with higher income than wheat or barley.

Delray Enger says that after deduction for mold, he's been paid as little as $1.23/bu. for barley that costs $2.25/bu. to raise.

Other important factors encouraging producers to switch to corn and soybeans are Roundup Ready and Bt corn — both allow producers to cut costs by reducing several trips through the field.

Farmers say there are no-till zealots, a requirement to raise corn in a part of the country that receives so little rainfall. That's particularly true in western North Dakota where rainfall is no more than 10-13 in./year, Ransom says.

“We capture every 1/10 in. of rainfall,” says Mark Erickson, a district sales manager for REA Hybrids in Mandan, ND. Several extreme western North Dakota and South Dakota counties have increased corn acreage 10-fold over a three-year span ending in 2004. “On an average annual rainfall of 14 in. we're producing yields as high 150 bu./acre,” he adds.

Another factor encouraging more producers to switch to corn is the adjustment recently made to the 1996 farm bill that allows them to increase proven yields for crop insurance purposes. That's “a big thing,” in the view of Jeff Enger. With a 100 bu./acre proven yield, and insurance that covers 70% of $2.43 corn, “there is a lot less risk in growing corn.”

Yet another incentive for more corn is a rapid increase in the capacity of elevators in the region to handle corn. This, of course, reduces the need for producers to have enough grain storage for every bushel raised.

How much will corn acres continue to grow? Some think 10-20% a year. Ransom thinks 3-5% is more realistic.

But in the short term, corn acreage may stay right where it's at due to high fertilizer costs. If that's the case, soybeans might look better to producers wanting to shift more acres out of wheat, says Curtis Van Dyke, senior loan officer with Ag Country Farm Credit Services in Valley City, ND.

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