The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Food for Thought on Ag Yields
Jun 11, 2012
We had a reader response to our last post on the U.S. rarely being No. 1 in yields that I thought I would share with you:
"Really interesting post. Something that jumped out at me was the need to keep in mind the spatial context of these numbers. Let's take Chile and Jordan corn production, for example. According to the 2003 FAO data, Jordan only raised 430 hectares (1,062 acres). Chile has a great irrigated growing environment, but you have to keep scale in mind. According to the FAO, Chile produces about 1.19 million metric tons of corn (about 47.6 million bushels). In the U.S., we have COUNTIES that produce almost that much corn (Yuma County, Colo., produces about 42 million bushels per year). Thanks for the article and the food for thought."
As the reader mentioned, the scale of corn production for these two countries is much lower than the U.S. production or even the production from one county in Colorado, Iowa or other corn producing states.
I think the key point for me is that as the demand for acres continues to increase, a farmer may want to consider investing more funds in (1) irrigation systems, (2) highly intensive crop management practices, or (3) other methods of substantially increasing yields. This may result in a much higher return to the farmer than simply chasing the neighbor's quarter section at $500 cash rent.
For example, in my home state of Washington, many areas near where I live had normal wheat yields of 20-30 bu. or in many cases even less. Starting about 60 years ago, many of these acres were able to be irrigated, and it is now very common for wheat yields on this same ground to be in the 175+ bu. per acre area and, in many cases, pushing over 200 bu. per acre. Corn yields are quoted in tons, not bushels, and many farmers continue to put semi-arid land into production each year and turn desert wasteland into $10,000+ per acre value.