Corn Keeps Growing
19 December 2008 Corn-dependent economies have existed since maize was cultivated by the ancient Latin American Maya, Inca, and Aztecs 5,000 to 6,000 years ago. Today, advancements such as genetically modified corn are used worldwide — and the future looks brighter than ever.
The rising demand for ethanol, particularly in the US, has caused a significant increase in fuel-corn prices. The price inflation extends somewhat across the board to crops grown primarily as feedstocks; as fuel crops decrease feedstock acreage, food and feed grain prices go up, and the cost to corn producers has gone up more than 10% between 2002 and last year.
There is good news, however, for crop input providers: potash (K) and phosphate (P) fertilizer prices have risen in the last several years, and while pricing is expected to level out this year, demand should increase due to higher corn prices paid to growers, and more acreage dedicated to corn. Potash prices are expected to continue climbing as global demand surges, mainly in areas such as China, Southeast Asia, and South America.
Shift To Corn
Along with driving up the prices of other grains, which must replace corn for feed and food, corn is taking away land as well. Predictions for 2007 in the US see corn taking away a large growing area from soybeans. Eight to nine million more acres of corn are expected to be planted within the continental US this spring, a near record amount of acreage.
With around 60% of the world’s corn production, the US remains the world’s largest corn producer, although the increase of corn grown for ethanol will cut into its exports.
Other countries have been handling corn’s rapid rise in popularity in different ways:
- Africa — Egypt has taken to importing poultry rather than corn for feed, due to an outbreak of avian flu. North Africa is growing as a corn importer while South Africa remains a strong grower and exporter of corn, with the majority of its exports shipping to East Asia. However, production may stay at its current rate as a result of land reform limitations.
- Argentina — the world’s second-largest corn exporter — plans to progressively increase corn acreage, responding as prices increase. With US exports slowing due to more fuel-corn dedicated to domestic use, Argentinian corn exports become more important to the world market.
- Brazil, torn between profitable soybeans and higher corn prices, has been increasingly growing more corn, although mostly for domestic use.
- Eastern European countries — especially new EU members Bulgaria and Romania — have increased growth and exports to feed a corn-deficient Europe.
- China is a major consumer of corn, mostly for livestock feed. Northeast China runs a surplus of corn, exporting to surrounding Asian markets. Expensive inland transportation to southern China is prohibitive, forcing southern China to import most of its supply. Chinese corn consumption is projected for continued growth, but as its production increases, domestic corn is expected to be directed towards ethanol manufacturing, while China increases corn imports.
- Worldwide, most countries will increase imports of corn, feedstuffs, and corn-fed meat products due to a lack of convertible area to grow corn or increase planting area.
Internationally, corn remains the predominant feed crop imported, with 77% of course grain traded through the actual and projected period of 1990-2016, according to Ronald Trostle, Paul Westcott, and Edwin Young, the three authors of “Agricultural Baseline Projections: Global Agricultural Trade”, 2007–2016.”
A Boost In Input Use
The corn input outlook is closely tied with natural gas; lower to moderate natural gas prices result in lower-cost nitrogen and ammonia-based fertilizers. While the high energy prices over the last few years have been prohibitive, cutting into fertilizer sales, the current reduced costs and increase in corn acreage should support global demand.
However, the best news for input providers has been high corn prices, which have resulted in growers discontinuing their corn–soybean rotations and replacing them with corn following corn. This double-corn practice has resulted in soil nutrient loss and greater susceptibility to pests and disease.
Growers switching from corn-soybean to corn-after-corn will require an additional 30 to 50 pounds of nitrogen (N) fertilizer per acre. Growers also need to monitor soil P and K, as these will also be depleted over years of continuous corn.
Corn-after-corn farming also changes growers’ herbicide options; higher crop residue levels reduce the abilities of soil-applied herbicides and leave fewer options. According to Bob Nielson of Purdue University’s Department of Agronomy, growers should focus on postemergence herbicides containing atrazine. Those who wish to continue using soil-applied herbicides should use full rates and apply before the weeds are 6 inches high. Finally, when glyphosate-resistant corn is being grown — or has been grown — in an area, herbicides with different modes of action must be used to control potential glyphosate–resistant weeds.
Growing continuous corn can also increase the danger of disease. With corn-after-corn — particularly when reduced tillage is employed — a great deal of extra corn residue is left on the surface. This increases soil moisture and delays seedling emergence, creating an extended vulnerability to seedling diseases and soil pests, such as white grubs and seedcorn maggots. Soil-applied insecticides, as well as careful inspections of seedling leaves and stems, are excellent defenses against early pests.
Gray leaf spot and northern corn leaf blight, two diseases known to attack hybrids, should also be watched for and fought with strobilurin fungicides. More information on controlling disease, pests, and soil nutrient loss with continuous corn.
With input-intensive corn’s expansion, taking land from soybeans and other crops, and prices rising higher as corn-fueled ethanol becomes part of the US energy plan, crop protection providers should see a bright future with corn.
Of course, input sales are always subject to the usual factors, such as future energy prices, weather, input inventory levels, government policies and price controls, and future crop prices. However, current market conditions and corn prices are strong, indicating a healthy demand for crop inputs this season.
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