A Bigger Kingdom for King Corn
The U.S. Corn Belt is breaking its bounds, stretching far beyond traditional growing areas in states south of the Great Lakes, along with Missouri, Minnesota and Nebraska to the west.
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Since 2000, a whopping 55% of U.S. corn acreage expansion has come in non-Corn Belt states. Corn “as high as an elephant’s eye” can now be seen swaying in former wheat fields in the Plains, as well as in former cotton, peanut, rice and tobacco fields throughout the South.
Four main factors fuel the growth: Soaring demand in the U.S. and abroad. Strong profits for farmers that grow it. Rising yields that, in turn, bring more revenue. And technological breakthroughs, including genetic advances, that allow farmers to grow corn in previously hostile environments.
Rising corn-driven land values spell attractive returns for investors. States with the greatest concentration of corn production are also ones whose cropland values have soared since 2009: they jumped 20% to 30% in 2012 from 2011. Corn is playing a major role in this year’s projected 63% growth in U.S. farm real estate values since 2003.
With consumers worldwide eating more meat, eggs and dairy products, more and more corn is needed to feed cattle, hogs and poultry. Moreover, corn is a main feedstock for making ethanol, and starting in 2015, U.S. ethanol production will be ramped up to 15 billion gallons per year versus 13.4 billion this year.
Farmers abroad are also boosting corn acreage — by 25% since 2003 — but they’re not keeping up with demand. U.S. corn exports will be relied on heavily to help meet consumption needs.
Though production costs in the U.S. (cropland, fertilizers, machinery, seed, fuel and labor) have soared in recent years, corn nevertheless produces solid profits for farmers. Prices have settled firmly in a range of $5 to $7 per bushel since 2010, compared with $2 to $2.50 per bushel in past decades.
As corn yields keep improving, averaging 160 to 165 bushels per acre nationwide in coming years, growers can expect to make $800 to $1,200 per acre in sales, about three or four times the basic operating cost of producing the crop. That’s a strong incentive for planting and growing it. Little surprise then, that corn acreage is becoming a bigger and bigger slice of U.S. cropland. Corn occupies 30% of all U.S. farm fields now and will inch up further to one-third or so by 2020, versus 25% in 2000.
Monsanto, DuPont, Dow AgroSciences and other biotech companies and plant breeders are doing their part to fuel corn’s inroads into new areas by developing a slew of improved varieties arriving annually: drought- and pest-resistant, more adaptable to Northern climes and shorter growing seasons, and resistant to herbicides to better accommodate weed control. The new varieties, together with more irrigation, a huge selection of crop enhancers and improved farming techniques, make it possible to grow corn successfully from coast to coast.
Sue Schulte of the Kansas Corn Growers Association says most of the state’s growth in acreage since the 1990s has been on dry land in the modest-rainfall areas of central and eastern Kansas, not on irrigated farms farther west. She notes, though, that new, hardy varieties entice more corn to the irrigated farms as well, because those strains mean pumping less water from already-stressed aquifers.
Higher-yielding strains of drought- and borer-resistant corn developed for hot Southern summers, along with the higher prices corn now commands, have Southern farmers planting more corn, says Ron Heiniger, a corn specialist at North Carolina State University. The Tar Heel State’s cropland values are rising to boot: up 6% last year. Farmers in North Carolina will harvest corn from 40% more acres this year than they did in 2000. In Louisiana, 100% more, and in Arkansas, nearly 450% more.
Meanwhile, hardier varieties developed for shorter growing seasons in the North will make it possible for farmers in North Dakota to harvest nearly 300% more corn this year than at the start of this century.