April 18, 2014

Investment by Nebraska corn farmers nearly $3 billion to plant 9.4 million acres


Chase County 2According to the U.S. Department of Agriculture (USDA), Nebraska corn farmers will plant 9.4 million acres of corn, about 94% of last year’s total of 9.95 million acres.

With Nebraska corn farmers’ intentions of planting 9.4 million acres of corn this year, farmers will spend about $280 per acre to get the crop in the ground and off to a good start, based on estimates calculated by the University of Nebraska Extension. Multiplied by the 9.4 million acres USDA estimates Nebraska farmers will plant, this figures to nearly $2.6 billion invested by the state’s corn farmers over a two-month period. That figure does not include land costs, labor or equipment – it’s purely inputs like seed, fuel and fertilizer.

Nationally, USDA said farmers intend to plant 91.7 million acres this year, which is 3.7 million fewer acres than the previous year. If realized, total corn plantings could be the lowest planted acreage since 2010. Notably, it would still be the fifth-largest U.S. corn acreage planted since 1944.

“We are looking at adding nearly $3 billion worth of economic activity into our state, which doesn’t even include the additional inputs, land and equipment expenses that come through the rest of the year,” said Tim Scheer, chairman of the Nebraska Corn Board. “This continues to be an economic booster for the rest of the year and those dollars reverberate through the rural economy and multiply to support Main Street, Nebraska.”

Just getting the crops in the ground is one form of economic activity, yet the full economic impact of planting reaches close to $6 billion for our state’s economy.

“Farmers will invest $2.6 billion in seed and fertilizer to get their crop planted, yet the economic value of that crop is even greater when harvested and that corn is converted to meat, milk and eggs, ethanol, distillers grains, bioplastics and more,” said Kelly Brunkhorst, director of research for the Nebraska Corn Board. “Corn is the foundation for all of that, so getting the crop in the ground and off to a good start this spring is critical. Then it’s up to the weather through the growing season to harvest.”

Historically in Nebraska, farmers begin planting in mid-April and wrap up as quickly as possible in May. However, weather is a key element for planting. And this year’s harsh, dry winter brings a concern of the available soil moisture that will be available come planting time. According to the April 14 USDA Nebraska Crop Progress and Condition report, topsoil moisture supplies in Nebraska rated 13 percent very short, 42 short, 45 adequate, and 1 surplus. Subsoil moisture supplies rated 17 percent very short, 43 short, 39 adequate, and 0 surplus.

Another challenge with planting investments this year is lower commodity prices, yet input costs continue to be on the rise. This makes the margin for the cost of production very slim for Nebraska farmers.

“This year will be a much tighter margin basis than we’ve had for several years and farmers will be producing much closer to the cost of production,” said Scheer. “With volatile market activity, hopefully there will be opportunity for farmers to lock in prices to manage their risk.”

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