A look at this year’s crop opportunities
April 14, 2006
Logan County CSU Cooperative Extension
CSU Cooperative Extension has promoted alternative enterprises, value-added farm products and off-farm income as the means for farm families to survive the current farm economy. As long as trade policy, farm policy and the relative value of U.S. currency favors out-of-country, lower cost producers then raising commodity crops for a profit will be a tough endeavor. Let us look at some opportunities for this coming crop year.
Alfalfa promises to have a reasonable opportunity for profit in the 2002 production year.
While stocks have increased over 2001 levels, usage is well balanced with supply. Premium profit opportunities lie with horse hay and high quality dairy hay. Producing these two categories is not achieved accidentally, but requires excellent management as well as good luck with favorable weather.
Dry bean prices look very enticing. According to Howard Schwartz, secretary for the Colorado Bean Network, production in the North Dakota/Canada region is expected to have a 30 to 40 percent increase in planting this spring. Low production in that area is responsible for this winter’s high prices. He suggests that if you know you can produce at a $15 to $17 per cwt. production cost, then beans should look good for you this year. Be sure to follow the nine step plan.
Corn is subject to world trade issues. The production of corn in northeastern Colorado has no effect on corn prices. That means that we remain a corn production deficit area, but our prices are controlled by the corn belt price plus transportation cost.
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Spring grains like barley and oats may offer an alternative to corn. Check out the county prices and loan rates at the FSA office. If we remain in a dry condition and rangeland grasses are slow to grow, forage produced by spring grains may be a profitable opportunity.
Wheat remains a premier crop, but like corn its price is controlled by both foreign and national markets. Most of Colorado’s wheat production is exported.
Millet and sunflower offer some opportunity when grown in a multi-year rotation with wheat. Intensive cropping on dryland is associated with increased profit per acre. In a study at Akron, the wheat-millet-fallow rotation showed the best opportunity for break-even, return to land, and return to management. The other possible rotations, including those with corn and sunflowers, had less chance of achieving that result.
Sugar beets remains a question mark. Without sufficient acreage sign-up, the farmer’s cooperative effort to buy-out Tate and Lyle could be undercapitalized. Undercapitalized cooperatives are noted for economic failures in the recent past.
Other crops are not developed to the point of having a viable market in place. Growing alternative crops proves unsuccessful because of marketing and transportation costs eating up any chance for profit.
Deciding what to grow this year will have a marked effect on your end of year bottom line. Unfortunately, there are no clear cut choices. A mix of forage, grain and livestock enterprises seems to offer the best chance for achieving profit this year.