story by Kim Souza
ksouza@thecitywire.com
Corn is a hot commodity in the Natural State given the year-round needs of the poultry industry, but this year Arkansas farmers plan to plan 280,000 less acres of corn, a 32% reduction from last year. The U.S. Department of Agriculture’s prospective planting report indicates row croppers are shifting away from corn to more soybeans and rice.
“The University of Arkansas crop budgets analysis this year indicates a better return on rice and soybeans, which is why many farmers are shifting away from corn,” said Matt King, director of market information and economics for the Arkansas Farm Bureau in Little Rock.
Arkansas growers expect to plant 600,000 acres of corn, compared to 3.35 million acres of soybeans and 1.52 million acres of rice, according to the USDA report. Soybean acreage is up 3% from a year ago, and rice acreage is up 41%.
Corn prices have fallen from around $6 per bushel last year to the $4.50 range, which has also impacted the national crop planting intentions. U.S. farmers expect to plant 91.6 million acres, down 4% from a year ago.
King said a long winter has put spring planting behind schedule in the Midwest and parts of Arkansas. With a smaller U.S. crop and increasing demand, King said any signs of drought or other weather impact could push corn prices higher given that U.S. supplies are tight.
LOCAL CORN
Mike Richardson of Triple M Farms near Brinkley said he will plant between 850 and 900 acres of corn this year, down from 1,500 acres in 2013.
“I hoped to have my corn planted by now, but we have rain lately that has kept the fields muddy and we are still dealing with some freezing temperatures at night. I hope to have all my corn in the ground before Good Friday (April 11), Richardson said during a phone interview.
Richardson sells his corn directly to the Arkansas poultry industry delivering to Tyson Foods and Wayne Farms.
“I deliver straight to the feed mills down around Pine Bluff, Pottsville and Clarksville. Once my grain is harvested, I dry it down below the 15.5% moisture level and then market it directly to the poultry companies. I get a better price and they get a higher quality grain without paying added rail charges,” Richardson said.
King agreed that local corn is typically higher quality than what is railed in from the Midwest. He said the local corn is closer to No. 1 quality than the blended No. 2 which is brokered out of the grain belt. Richardson said he stores the corn and markets it throughout the year.
Third generation row cropper Tommy Young co-owns a large farm near Newport. This year his operation will plan 2,300 acres of corn, about 2,300 acres of wheat and soybeans, along with 1,500 acres of rice.
“That is our standard crop rotation and we don’t deviate from it just because the price may be better this year or next. We started planting corn on Monday (Mar. 31) and got about 750 acres planted but we stopped because of rain yesterday. Rain and storms are expected so I imagine we won’t be done planting until around April 15,” Young said in a phone interview.
He said the ground has been cold, which has pushed planting starts back at least a week in his area. Young also markets his corn directly to the poultry and egg industries with feed mills within 200 miles of his farm. Young said as long as corn stays above $4 a bushel there is money to be made by row croppers who can sell locally.
Young said he sells to Cal-Maine in Searcy, Peco Foods in Batesville and Butterball near Mountain Home, as well as to local brokers who transport his corn to the Springdale area.
“We dry the corn and store it in our elevators and sell where we can make the most money,” Young said. “We get about a 25 cent basis over the Chicago Board of Trade prices, that premium has come down in recent years as more corn has been available.”
He said the Peco complex around Batesville got all the corn they needed last year from local Arkansas farmers.
Todd Simmons, CEO of Simmons Foods, said they source grain from Arkansas, Missouri, and Oklahoma as often as possible. This is typically during the harvest time period
Tyson Foods, the nation’s largest chicken company, estimates its grain costs will be $600 million less this fiscal year compared to the previous year, with lower corn and soybean prices. The meat giant spends roughly $1 billion in feed annually.
CROP INTENTIONS
King said rice is making a comeback in planted acreage in 2014, up 41% from a year ago.
He said the California crop is short because of drought and U.S. rice suppliers are tighter than they have been in the past. He said as global production has risen, exports have subsided which diverted acreage to soybeans in recent years.
Young said he still plants rice, but he considers himself more of a corn and soybean farmer today because they crops are easier to manage.
Cotton acreage intentions are 340,000 acres this year, up 10% from last year, but still low in historical terms.
King said farmers have moved away from cotton toward corn and soybeans because they are easier to grow and have garnered better pricing.
Richardson used to grow cotton but back-to back years of blight was all he needed to make the shift to corn.
“Cotton comes out of the ground looking to die, corn and soybeans come out of the ground looking to live,” according to King, who said that’s what the farmers tell him.