Will Growers Stay With Corn or Switch to Sorghum?

April 8, 2016 05:00 AM

Despite this year’s depressed corn prices, a larger than expected share of producers in the western Corn Belt told USDA this spring they intend to plant more acres to corn and fewer to wheat or sorghum.

Since USDA conducted its annual Prospective Plantings survey, however, market and soil conditions have changed enough that some of those acres could shift back into sorghum.

Corn acres in the recent Prospective Plantings report were much higher than analysts expected in several states, with large year-over-year increases in:

  • North Dakota (up 24%);
  • Kansas (up 6%);
  • Texas (up 13%);
  • Missouri (up 11%); and
  • Colorado (up 14%).

It appears that several factors entered into producers’ decision-making processes this year, with the first and foremost being the expectation for another year of high corn yields.

“The seed dealers told us corn seed sales in North Dakota were being driven by 2015’s incredibly good corn yields,” says Mike Krueger, president and founder of the Money Farm, a grain marketing advisory service in Fargo, N.D. “Wheat didn’t return as well as corn, and farmers are taking a chance they will repeat last year’s big yields and that the yields will help to offset low prices.”

The belief that history will repeat itself is called “adaptive expectations,” which are common in agriculture, according to Dan O’Brien, agricultural economist with Kansas State University.

One of the factors feeding into this year’s adaptive expectations was good soil moisture in states like Kansas. “We came through the winter with strong subsoil moisture, but now we are starting to see some dry conditions develop in parts of Kansas,” said O’Brien. “In years when all else is equal and there is no lack of water, corn will out-yield grain sorghum.”

USDA’s Prospective Plantings report showed that U.S. producers intend to plant 15% fewer acres of sorghum this year. Large shifts out of sorghum occurred in:

  • Missouri, where acreage plunged 52% to 75,000 acres;
  • Colorado, where acreage fell 18% to 360,000 acres;
  • Texas, where acreage was down 15% to 2.2 million acres; and
  • Kansas, where it fell 7% to 3.15 million acres.

Also favoring corn this year over sorghum is the ongoing concern over the sugarcane aphid. The pest started feeding on grain sorghum and sorghum forage in Texas in 2013 and has now spread to at least 12 southern states and as far north as Missouri.

“We have also seen a return to a more normal price relationship between corn and sorghum, compared to when sorghum exports to China were so high,” O’Brien noted. “If dry conditions continue to propagate and grow in Kansas, we could see farmers change some acres back to grain sorghum.”

China’s recent announcement that it would move away from its strategy of stockpiling corn and instead let markets dictate prices could also convince some producers in the western Corn Belt to plant grain sorghum this spring instead of corn, O’Brien added.

Will you opt for corn or sorghum this year? Let us know in the comments and send your #plant16 photos and observations to AgWeb.

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Spell Check

Red wing, MN
4/8/2016 05:10 PM

  Forget all of it . plant to CRP.