Corn growers harvest big yields, small profit

GREELEY – The national corn harvest is projected to hit a historic high this year, but Colorado’s crop, while healthy, isn’t generating much excitement locally because of lower prices and rising production costs.

Weld County lies at the heart of Colorado’s largest agriculture economy and has 1.8 million acres of farmland, while Larimer County has 522,000 acres. Corn is among the major crops produced in the region.

Mild temperatures and increased moisture have driven production higher, said Mark Sponsler, chief executive of Colorado Corn, a Greeley-based industry group.

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“Those temperatures and moisture have favored growing conditions for corn not only in Colorado, but also all across the Midwest through the bulk of the Corn Belt,” he said. “So we’re looking at a big crop in Colorado and nationally, and that almost always translates into lower prices.”

Artie Elmquist, who farms corn in Weld County near Longmont, said farmers have had to look at further ways to reduce their costs, such as tilling less often to save fuel as well as using less water. He planted 90 acres of corn this year, some for silage and some for grain.

“The corn market pricing makes it very challenging to make a profit,” he said.

Despite lower prices for corn, Elmquist said, farmers have benefited from increased demand for dairy-cow feed because of the Leprino Foods cheese plant in Greeley.

Statewide, farmers planted 960,000 acres of corn for grain for a projected total of 138 million bushels, healthy but still less than the nearly 183 million bushels the state produced in 2010.

Average corn prices, however, have declined to less than $4 per bushel this year from $6.15 in 2011 amid high costs for Northern Colorado farmers. Even during the record production year of 2010, the average price of corn totaled $4.98 per bushel, well above the four-year low of $3.32 at the Chicago Board of Trade earlier this month.

The U.S. Department of Agriculture predicted a record-high corn crop of 14.4 billion bushels, up 3 percent from the previous record 14 billion bushels last year.

This year’s corn for grain harvest could yield an average 171.7 bushels per acre, up from 158.8 bushels last year.

Sponsler said the increased supply has contributed to lower prices. Northern Colorado farmers who set contracts with higher prices will do OK, he said, but some did not set contracts with buyers because of increased risk. Setting a fixed-price contract means guaranteeing that a certain number of bushels can be delivered.

As yield grows, farmers’ production cost per bushel has declined, but not enough to make up for the decline in prices.

“The cost in many cases for producers may be higher than what they receive for (corn) this year,” he said.

Kent Peppler, who farms corn in Weld County, said advances in farming technology such as genetically modified corn have increased his yields, but may not make up for lower prices. Meanwhile, water, equipment and insurance costs have risen.

“In the years where we have lower prices and the expenses stay the same or go up, the only thing we have left is yield,” he said. “When we don’t have (higher) prices, we depend on yield.”

Steve Lynn can be reached at 970-232-3147, 303-630-1968 or slynn@bizwestmedia.com. Follow him on Twitter at @SteveLynnBW.