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Title: COMMENTARY ON CROP ROTATION

Author
item SINGER, JEREMY

Submitted to: Popular Publication
Publication Type: Popular Publication
Publication Acceptance Date: 1/2/2006
Publication Date: 1/4/2006
Citation: Singer, J.W. 2006. Commentary on crop rotation. Pioneer Growing Point Magazine. January 2006. p. 21.

Interpretive Summary:

Technical Abstract: The USDA National Agricultural Statistics Service data from 2002 to 2005 indicates that acreage of soybean is declining and acreage of corn is increasing in Iowa and Illinois. Between 2002 and 2005, corn acreage has increased about 6% in Iowa and 8% in Illinois, while soybean acreage has decreased about 3% in Iowa and 8% in Illinois. It appears that the corn-soybean rotation is shifting more to a corn-corn-soybean rotation, even though most producers know that they are losing yield by planting second year corn. On average, corn yield decreases about 10% to 15% in second year corn compared to corn following soybean in a two year rotation. The big debate is whether this trend will continue. Several issues are driving this shift in acreage. Corn acreage increased 2% and 3% in Iowa and Illinois from 2004 to 2005. Much of this shift is probably attributed to concerns about soybean rust. Although rust did not reach the Corn Belt during the 2005 growing season, it will remain a valid concern for near-term soybean production. Other disease, insect, and weed issues including white mold, bean leaf beetle, soybean aphid and herbicide resistance contribute to risk and costs associated with soybean production. Uncertainties associated with corn production include rising energy costs and pest resistance. Nitrogen and drying costs account for about 15% to 20% of the total production costs for corn. And corn following corn costs about 5% to 10% more than corn following soybean to produce. The one certainty about corn production in the Corn Belt is that demand for corn is high. There are about 23 ethanol plants currently under construction that will add to the 80 already in production using corn inputs. This increase in demand may have a positive effect on corn prices, which could shift more acres into corn, despite potentially higher production costs than soybean. The availability of hybrids with stacked-traits that protect against corn rootworm and European corn borer in the near-term reduce the risk associated with corn production. Additionally, adding value by harvesting and selling corn stover may increase the profitability of growing corn. Other considerations that will affect acreage of corn and soybean include federal farm policy. If green payments replace commodity payments over time, corn may be affected more than soybean, which could lower corn acreage. If soybean production in South America decreases, soybean prices may increase enough to warrant the risk associated with production. Furthermore, increasing uses for soybean, particularly biodiesel may improve prices for soybean in the next couple of years. On the horizon, if global change forecasts for more volatile weather patterns are heeded, producers may shift some acreage away from summer annual crops to winter annuals such as wheat or triticale, or perennials, if local markets expand.