JUNE 2007: AROUND THE STATE, AGRICULTURE
Balancing the corn equation
HERMISTON — Mike Hawman is standing at the edge of his
plowed field, hollering distance from the Columbia River, and
pulls a calculator out of his breast pocket. His beefy
farmer’s fingers stab at the tiny keys and a smile
spreads across his face.
“$150 a ton,” he announces, having made the
conversion from bushels to tons. It’s what he’ll
get for the field corn he’s planting this year — a
crop he didn’t even bother with in 2006 because it
wouldn’t have made his family farming operation any
money.
“Last year it didn’t pencil,” Hawman says.
“This year, we’re planting the max.”
Demand for corn for ethanol has put record numbers of field
corn seeds in the ground this growing season — nationwide
the U.S. Department of Agriculture pegs it at just over 90
million acres, up 15% over last year and the most since World
War II.
The corn rush is prompting the biggest shift seen in
agriculture for decades — and it’s not all good
news.
Rising corn prices, inching past $4 a bushel up from around $2
last season, are having an updraft effect on the other major
commodities: wheat, cotton and soybeans. Vegetables such as
peas and sweet corn are harder to come by as growers are
planting more field corn to take advantage of higher prices.
And the corn being sold to ethanol plants is pushing up the
price of the corn bought for feed.
But as consumers brace for higher grocery prices, many growers
are experiencing a rare burst of optimism.
Even though Oregon isn’t considered a corn state,
growers in the irrigated Columbia Basin consistently get the
world’s highest corn yields, much to the chagrin of their
brethren in Iowa. At U.S. Corn Growers Association conventions,
Oregon growers are like sports stars, with other farmers
reciting their per-acre yields, more than 300 bushels per acre
in some cases, like batting averages.
“This land, it doesn’t look like much, but
there’s no one else who can compete with us in
yields,” says Phil Hamm, supervisor of Oregon State
University’s Hermiston Agriculture Research and Extension
Center. Hamm says the basin’s soil, light intensity, long
growing season and the irrigation water pulled from the
Columbia work together with warm days and cool nights to create
prime growing conditions for many crops, including corn.
Having already locked in the price he’s going to get for
the corn he planted the last week in April, Hawman says
he’s ready to start buying “iron” —
tractors and other gear, purchases he’s put off in leaner
years.
Bruce Ford, who farms his in-laws’ land on the other
side of Hermiston from Hawman, says he’s been planting
field corn since 1986. “I can count on one hand the times
corn has been above $125 a ton,” says Ford, who has
locked in a $155/ton price for the 530 acres he planted this
year.
Ford explains that some farmers will lock in a price early,
while others will play the market and hope the price will spike
even higher. “People get greedy, but my banker thinks
I’m a hero,” he says.
But even Ford is getting pinched by the field-corn frenzy. In
addition to pushing up the price for other crops, the sudden
demand for corn has also goosed the price of fertilizer. Ford
figures he’ll pay about 25% more for fertilizer this year
for a total of $150,000. He says he was also lucky to have
bought his seed early because his seed salesman was sold out of
field corn seed well before fields were plowed.
Brent Searle, deputy director of the Oregon Department of
Agriculture, says early numbers show the uptick in field corn
planting is negligible at 55,000 acres, up from 51,000 acres
planted last year. But the lure of corn has been blamed for a
statewide hay shortage as some growers forsake alfalfa for
field corn. And vegetable processors are having a tough time
finding farmers who will sign a contract to grow crops such as
sweet corn and peas instead of field corn.
“It’s a real issue,” says Dave Stoddard,
sales manager for Smith Frozen Foods in Pendleton. Stoddard
says the company will be down 18% to 20% in the vegetables it
will process this year, a shortfall that translates directly to
the bottom line.
Smith is paying more for sweet corn and peas, but the company
still doesn’t have the acres under contract it needs to
have a full-capacity processing season. “There
aren’t enough acres to go around,” Stoddard
says.
Katie Fast, associate director of governmental affairs for the
Oregon Farm Bureau, says it’s a mixed bag for Oregon. On
the one hand, growers of wheat and grass seed are benefiting
from the higher prices their crops are able to fetch, thanks to
the ripple effect of ethanol demand. Meanwhile, the
bureau’s livestock sector is struggling with higher feed
prices. “This is coming on top of high energy
prices,” Fast says, “and our concern is that the
farmers are absorbing the cost.”
— Christina
Williams
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