Several retailers reported that planting intentions for 2013 so far are similar to 2012, with many still “bullish” on corn acres. Mitchell projects the Gulf region may see some corn acres replace cotton. “I think it’s going to be another big year on corn, but let’s just hope we get some rainfall this fall and winter, get some recharge going.”
Dealers said they are hearing projections of 96 to 100 million acres of corn for 2013, but those impacted most by the drought in Indiana, Illinois and Iowa question the figure.
“I don’t know how we’re going to hit that,” says Dan Mogged, vice president of Van Horn, Cerro Gordo, IL. He reports dismal performance by some hybrids for the past two years in corn-on-corn fields in the region. Those kinds of results make it very difficult for his sales force to recommend one product over another to customers for 2013. He says growers have been “slammed” in these rotations, investing in pricey inputs only to get disappointing yields — 50 to 80 bushels per acre less than fields where corn followed soybeans. Mogged says he could see at least 5% of this year’s corn acres shift back to soybeans.
Hintzsche’s Eggleston, also in Illinois, says planting intentions are “all over the board right now,” with some growers leaning toward more soybeans. “I would say if we don’t get some decent snowfall and rain this fall and next spring, growers may lean towards beans. Our subsoil moisture is pretty depleted.”
MRM’s Mainord thinks that if bean prices and fertilizer prices go up, “that will tend to trim the corn acres.”
Dealers are working to make seed sales a good experience for growers. A key is the value of their sales agronomists in building relationships with and conveying seed information to customers. Seed staff face a steep learning curve, especially considering the sheer number of new varieties hitting the market every year. The life cycle of a hybrid has gone down to two or three years, from five years a decade ago.
North Central Farmers Elevator has seen the benefits of ongoing customer communication. As word has spread about the company’s products and service, Mielke has had to add 18 new members to his sales force over just the past five years.
Part of seed management is pricing, including finding the rate that will bring acceptable margins. While customers may complain about seed costs, G&H Seed’s Hensgens emphasizes margins do mean value for the grower. “A farmer is the best judge of value,” he says. “If he trusts his crop advisor, he orders products with their appropriate margins providing the crop advisor service. If a grower uses a consultant, then he pays the consultant and shops price first, then compares the other services offered by the dealer. Custom application services greatly impact those decisions.”
Hensgens would say the value of traits was acceptable to growers until a “value shift” took place a few years ago — when the price of seed went up in exchange for lower herbicide prices caused by generic chemical introductions and patent expirations.
In Missouri, MRM’s Mainord sells to customers who still use public varieties. Many of the elevators in his area pay a 60-cent premium for non-GMO soybeans, which his growers have found perform very well. “In fact, most producers who grow traditional varieties will tell you they perform as well as anything that’s on the market,” he says. A sobering thought considering non-GMO seed costs $18 to $19 per bag, vs. $52 to $65 for traited seed.
A number of dealers commented that while agriculture continues to fare well compared to other industries in the current economy, they and their customers are uneasy. The latest Farm Bill has yet to be finalized, and at presstime dealers contemplated how the looming elections could greatly affect the bill’s outcome. “One year down the road, how will farm programs and crop insurance look?” asks Mogged.
Mainord thinks growers are being a little cautious in their buying decisions, even with high commodity prices. One reason in particular: How will tax structures look after the elections?
“They affect us tremendously,” he says. “Even though we handle a lot of money, sometimes we don’t get to keep a lot of it.”