Lessons from a Tough Year

February 28, 2012 10:44 PM

By Karl Wolfshohl

A High Plains farmer adjusts crop mix to cope with Mother Nature

The withering heat and drought that decimated Texas agriculture in 2011 convinced Wesley Spurlock to modify his crop mix for 2012 and beyond.

p54 Lessons from a tough year
Corn yields typically top 200 bu. per acre for Wesley Spurlock, but after next-to-nothing yields in 2011, he is planting less corn. By doing so, he hopes to have more water to grow as much or more corn on fewer acres.

"We have to water all of the corn we grow, and we’ve always been confident that we can raise 200-bu. to 220-bu. corn any year," he says. "But last year we were humbled.

We learned that Mother Nature can take it all away. We learned that we can add 24" to 26" of water and still lose the crop."

Spurlock farms 10,000 acres of corn, cotton and small grains for himself and family members near Stratford, Texas, and does custom spraying and harvesting.

The northern Texas Panhandle certainly isn’t known for its high rainfall, averaging only 18" yearly. Fortunately, most of it usually falls in the summer and area crops are kept alive and thriving by water pumped from the southern end of the Ogallala Aquifer.

This past year started off dry and got worse. There was essentially no rain through the season, and record heat destroyed corn plants’ ability to convert water and nutrients to grain. On Spurlock’s farm, there were 66 days during the growing season that topped 100°F, meaning "no rain, no humidity and 20 mph to 50 mph winds every week," he explains.

"On June 26, it was 113° on our farm, with 35 mph wind and 5% humidity," he recalls. "It was a convection oven. On that day, we had corn burn up while standing in [irrigation] water. Evapotranspiration was massive. We abandoned lots of acres two days later.

"In other fields, we grew beautiful plants, but we discovered later that we had no corn," he continues. "The timing of pollination was terrible. There were plants 7' to 8' tall that were appraised [for crop insurance purposes]at 1.7 bu. per acre."

What to Do? There isn’t much relief for the heat, but Spurlock is adjusting his crop mix under center-pivot circles this year to provide more water for corn and cotton, in case the drought repeats itself.

If rainfall is back to normal, he figures, the extra irrigation water will help him grow more corn.
Pivot circles that were half corn and half cotton in past years will now be divided into thirds and
will include wheat.

"It’s insurance—not so many acres of summer crop," Spurlock says. "This way, we’ll have more water if the crop needs it." If the year turns out wetter and better than 2011, he will shoot for corn yields in the 260-bu. to 280-bu. range.

His revised crop mix cuts corn acreage to 2,800 from 3,500 in 2011. In a year of ample rainfall and cooler temperatures, he could add more inputs, including water, and grow as much or more corn on fewer acres.

Several steps are being taken in the Texas Panhandle to try to have half of the aquifer’s water remaining in 50 years. To meet that goal, a restriction was recently placed on the amount of water that can be pumped for crops. In 2011, Spurlock’s water district restricted pumping to 1.75' of water per acre. In 2012, the limit has been reduced to 1.5 acre-feet.

Feeling the effects of dismal yields on his bottom line and knowing he has to conserve water, Spurlock hopes his revised crop mix will come out on top regardless of what 2012’s weather has in store.

Corn Prices: Two Sides of the Coin

Wesley Spurlock is active in the National Corn Growers Association and is the Corn Board liaison to the National Cattlemen’s Beef Association. His area finishes more cattle annually than anywhere in the world. Spurlock used to be in the cattle-feeding business, so he is acutely aware of how high corn prices affect end users.

"Sometimes cattle-feeding margins have been thin and sometimes not," he says. "Information out of Texas A&M shows that cattle have been profitable even as corn has gone up because cattle prices have risen as numbers have dropped off."

In mid-January, when USDA reported higher stocks of corn than previously thought and corn prices dropped, cattle feeding margins improved. Where they’ll be in coming months and years is the big question, of course.

Tight Stocks and Ethanol Weigh in. "We have a very tight global situation for corn, and that’s not going to change overnight," says Mark Welch, a Texas AgriLife Extension economist specializing in grain marketing. "Over the last several years, expanded demand for corn as fuel has driven us to these tight stock levels. It’s put pressure on livestock producers and other corn users."

Welch says that in 2012, demand categories are leveling off, if not declining, in the face of expectations for a big U.S. corn crop.

"Exports are down, and feed use on an animal unit basis continues to decline since the biofuel era began in 2006 and 2007," he says. "Even if we factor back in byproducts from distillers’ grains, we’re seeing a net decline in feed use per animal unit." This combines with a smaller cowherd and questions about when or how much cow–calf producers will expand their numbers.

Welch doesn’t expect the corn demand for ethanol to increase, based on the fact that ethanol tax credits expired at the end of 2011 and we’re maxed out on the number of E85 pumps domestically. "We may export ethanol, but overall, I don’t see growth in the corn-for-fuel sector over the next several years," he adds.

Production Push. On the production side of the equation, 2012 is likely to be a record year for corn in the U.S. Ahead of USDA’s planting intentions report in March, Welch says, some private firms have estimated that U.S. farmers will plant 94 million to 95 million acres of corn this year, contrasted with 92 million acres in 2011 and a record 93 million in 2007.

The Jan. 12 USDA wheat seedings report showed acreage of soft winter wheat down substantially in the Midwest, with a half-million fewer acres in Ohio, Indiana and Illinois combined. Those acres will more than likely be planted in soybeans or corn.

"With anything near a normal yield, we’re looking at a lot of corn," Welch says. "The price implications might be good for the livestock sector and devastating to the corn farmer." He says prices could fall into the $4.80 to $4.90 range unless there’s a weather scare, in which case "there could be a significant increase in grain prices."

Through a "collar" program his elevator offered in early winter, Spurlock hedged to protect himself against such drastic price drops.

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