By JOSEPH S. PETE, Daily Journal of Johnson County staff writer
More rows of corn stalks will sprout on Johnson County farms this summer than in past years, but they won't crowd out soybeans as much as has been projected for other parts of the state and country.
A booming export market and an increased demand for ethanol, an alcohol that can be made from corn, have driven up the price of corn, Purdue University agricultural economist Christopher Hurt said.
While the demand is high, little corn from Johnson County will end up in gas tanks, said Phil Gorrell, manager of Kokomo Grain, a major grain elevator in the county.
But farmers still stand to benefit from the high prices.
The average corn grower in Indiana could earn an estimated 35 percent more this year than last, Hurt said. But consumers will pay for the high price of corn, which sweetens sodas and feeds livestock. Overall, a trip to the grocery store is expected to rise by up to 5 percent this year, he said.
Nationwide, farmers are expected to plant the largest corn crop since World War II and 15 percent more than last year, according to statistics from the U.S. Department of Agriculture.
Farmers trying to cash in are planting corn instead of soybeans, wheat and other crops. As many as half of Johnson County farmers are planting more corn this season, but more farmers here are sticking to their usual rotation of crops than elsewhere, Gorrell said.About half the farmers in the county plan to plant 60 percent of their fields in corn this year, Johnson County Farm Bureau president Tracy Mabry estimated. Many will plant fewer acres of soybeans and cut out small wheat crops altogether, he said.
The exact acreage devoted to corn won't be known until the summer when farmers report their plantings to state and federal agriculture departments.
Corn and soybean crops conventionally are split half and half, Hurt said. The common practice is to rotate corn and soybeans from year to year so farmers don't deplete the soil and invite more insect pests.
But for some farmers, the profits that can be made from growing exclusively corn outweigh the cost of not rotating, which requires more fertilizer and insecticides.
Farmers are estimated to make $95 per acre of corn this year, a 35 percent increase from last year, Hurt said.
A new federal renewable fuel standard has dramatically increased the demand for ethanol, he said.
Concentrations of up to 10 percent ethanol can be mixed with gasoline in conventional vehicles. But specially equipped vehicles can use a fuel blend called E85, which is 85 percent ethanol and 15 percent gasoline.
Farmer James Risch decided to plant 20 percent more corn this year, cutting down on his soybean acreage. He doesn't know if the wet spring weather will keep his investment from paying off.
"It's a long way until harvest," he said. "I'd like to see the profit on paper."
The price is higher, but the cost of planting corn is up too.
The price of corn seed went up 15 percent. The crop requires nitrogen fertilizer, a natural gas-based product, which rose 20 percent in the past year, according to U.S. Department of Agriculture statistics. Risch hopes to turn a profit this year but worries about the rising costs.
"It's not going to be a total windfall for me," he said. "It's gotten more expensive."
Plus, the weather could lower Risch's yield. The wet soil has slowed planting, which means there may not be enough growing time for the plants to mature. The summer also is predicted to be dry.
"I know not to have a false sense of security," he said.
Weather aside, the demand for ethanol should remain high for the foreseeable future, Hurt said.
A new federal standard calls for the production of 7.5 billion gallons of renewable fuel by 2012, which nearly doubles the current annual production, according to Purdue University.
Ethanol plants would use 2.5 billion bushels of corn to make the renewable fuel, or an increase of 1 billion bushels from the current level, Hurt said.
Even if none of the corn grown locally ends up in gas tanks, the demand should keep the price high, Hurt said. The price dropped slightly when the U.S. Department of Agriculture in March projected a record harvest, but it's been hovering about $3.50 a bushel.
"The days of $2 corn are over," said Russ Hanshaw, an employee for Morristown Grain, an elevator in Shelby County. "There's a political mandate for alternative fuels, and the demand curve has shifted."
William Kirklin and his half brother, Jud Vaught, lined up contracts for their corn crop but probably would have planted more corn this year regardless. Now, they're confident they can turn a good profit after years of corn prices of around $2 a bushel.
Kirklin and Vaught often found it hard to break even on corn at $2 a bushel unless their yield was greater than 150 bushels per acre, which is typical in Johnson County.
They elected to plant 300 more acres of corn this season, but the decision was based partly on seed contracts they landed for their crop.
The pair had to rush through plowing early this year to clear away last year's corn stalks, which they would have plowed under before planting soybeans in late May.