A Case for Lower Corn Seed Expenses

David A. Widmar

August 24: corn-sign rows

While most of the 2014 corn crop is still in the field, planning for the 2015 crop is underway. Long before the combines start fall harvest, the importance of the 2015 budget will begin to come into focus.

The big story in 2015 will be lower commodity prices, especially for corn and soybeans. The question on many producer’s minds is how much, if any, relief might come from lower input prices?

A look at 13 years of historic Purdue Crop budgets reveals an interesting trend in corn seed expenses.

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A Look at Corn Yield Risks

In 2012, Spring had come early. Across the Midwest, producers planted their crops ahead of schedule and in favorable conditions. As they parked their planters in the shed for the season, they were left to hope for the best.

What unfolded in that growing season was devastating to millions of acres across the United States. Some of the world’s most productive soils were struck with a drought like nothing in recent history. And while the risks of a disappointing crop are always present, the memories of this drought will live in the minds of agricultural producers for years to come.

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Corn Yield Trends

One of the greatest stories in the history of agriculture is the increase in corn yields over the last several decades. While weather ultimately influences yields for a given year, the underlying trend across the country is that more bushels of corn can be expected each year.

These great scientific increases generally work to increase the productivity of farmland and are an important factor in determining the rate of return that investors will earn on farmland investments.   While you often hear about the national trend yield when it comes time to estimate the size of the expected corn crop, we decided that it might be interesting to examine how yield trends varied across counties in three different states: Indiana, Illinois, and Iowa from 1950 to 2012.

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