Solid Yields, Lower Prices and Product Payback

by Patrick Kirchhofer, Peoria County Farm Bureau

We had great harvest weather in September and early October, with nearly half of the corn and soybean crop in the Peoria area harvested by the first of October. The heavy and persistent rains that fell in June transitioned to dry conditions in late July, extending through August and September into early October. As is often the case, the rains seem to average out over the course of the entire year.

So how was the corn and soybean harvest in 2015? For the most part, farmers are experiencing better-than-expected yields. On average, the corn harvest is coming in with solid yields, though they appear to be 10 to 15 percent lower than last year's record crop. As predicted, combine yield monitors are providing data to farmers that is quite sporadic in many fields. For example, the yield monitor might register 220 bushels an acre of corn in one section of the field that was able to drain off the excessive June rains, while falling back to 100 bushels or less per acre in another section that remained wet.

On the soybean side, it's shaping up to be an excellent crop. Several reports have soybean yields at 60-plus bushels an acre.

One agricultural product in which many farmers have invested over the past five to 10 years is fungicides. The wet June caused diseases such as gray leaf spot and northern corn leaf blight to develop in the corn crop. Septoria leaf spot is one disease that, year in and year out, tends to dent soybean yields, while sudden death syndrome, frogeye leaf spot and other diseases can also be a hindrance.

In June and July, fungicides such as Headline AMP, Quilt Xcel and Stratego YLD were sprayed primarily by airplane, although some were applied with a high-boy sprayer, which has its wheels elevated so it can treat an eight-to-12-foot tall corn crop without knocking over the plant. Fungicides are typically applied on corn fields when the plants are tasseling (pollination with kernels being set on the cob) and to soybeans when the plants are beginning to set pods.

Reports indicate that timely fungicide applications added 10 to 20 bushels of corn per acre and five bushels per acre of soybeans. The effectiveness can vary depending on the variety of corn or soybeans, the severity of the disease infestation and the weather following application. Fungicides cost farmers approximately 30 additional dollars per acre for the product and application. Each year, they must determine whether this additional expense is worth it. This year, the payback seems to have been a good investment.

With all of these positive vibes on the yield side of farming, there is also the price side of the equation. Farmers are generally price takers, taking what the free market determines is the correct price. With last year's record crop yield, current surpluses high and a good crop this year, both corn and soybean prices have fallen significantly. The price for a bushel of corn that farmers could receive in October was around $3.60 a bushel, and the price for soybeans was in the $8.70/bushel range. Given these lower prices, many bushels were put into storage with the optimistic view that prices will trend higher in the future. iBi

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