'Wildest dreams' amid farm fears

High corn prices battle with rising fuel prices

May 20, 2008|By Chris Guy | Chris Guy,Sun reporter

CORDOVA - On his family's 3,000-acre farm near Easton, Bobby Hutchison has been monitoring an office computer every 15 minutes for updates on Chicago commodities markets. But lately, it seems he ought to be checking the cost of diesel fuel and fertilizer nearly as often.

The Hutchisons and other Eastern Shore farmers have been deciding how much land to devote to corn - a crop that is commanding $6 a bushel, triple the price it fetched just a couple years ago. On the flip side, though, is the soaring price of diesel fuel that keeps a fleet of tractors and combines rumbling.

"With corn prices like this, it's really our wildest dreams," Hutchison says.

Yet it's also worrisome. High corn prices could mean one of the best years ever for Shore farmers - but if production costs keep going up, they could lose a bundle. Similar uncertainties confront Marylanders from all walks of life these days as they try to navigate a fast-changing economic landscape. Many families are buffeted by forces such as higher food and energy prices and stagnant wages. At the same time, a tumultuous economy can bring opportunities - potentially, for instance, in the sale of corn.

But corn is a gamble. While risk is part of the business with any crop, good fortune is more crucial for corn - starting with a two-week window of opportunity, usually in mid-July, when tassels and silk form and begin the pollination of the plants. Corn always needs water, but if the plants don't get enough during this period, the crop can be lost.

The pumps that keep water flowing over parched cornfields are powered by diesel fuel, with its skyrocketing prices. Add to that the increasing cost of nitrogen - a key fertilizer for corn that requires petroleum - and farmers are taking a hard look at the math and shifting their strategy.

So even with corn prices hitting the roof, some farmers are planting soybeans on fields where corn grew last year.

"I'd say that Maryland farmers are going to be planting 10 percent less corn than last year," says Lynn Hoot, executive director for the Maryland Grain Producers Association. The cost of planting an acre of corn is $500 to $600, compared with perhaps half that to plant and harvest an acre of soybeans.

"You can avoid nitrogen costs because soybeans don't need it, and beans will survive drought much better," she says. Some farmers will be "double-cropping," planting soybeans - used for everything from cooking oil to animal feed - without tilling the stubble of winter wheat fields they'll be harvesting in the next few weeks.

The unprecedented surge in demand for American grains - corn, soybeans and wheat - is being driven by everything from increased production of ethanol, which is made from corn, to severe drought in Australia to the buying power of an emerging middle class in China to speculation by commodities traders.

Hutchison figures his family isn't much different from other Eastern Shore farmers in the early days of a growing season unlike any in memory. They are giddy about unheard-of prices for corn and other grain but guarded about the spiraling cost of everything needed to grow them.

Last year, the Hutchison clan - Bobby, two of his brothers, his son and a nephew - burned their way through 70,000 gallons of diesel. The fuel feeds six-figure pieces of farm machinery that come equipped with GPS laptops in air-conditioned cabs. It also runs the irrigation pumps. Irrigation helped the family avoid a disastrous corn crop last year, a drought year that farmers say was Maryland's worst scorcher since 2002.

Another dry season could cost the family $250,000, nearly double last year's diesel bill.

Already, the Hutchisons have planted corn on half their land, 1,600 acres, and have begun planting soybeans on much of the rest, including land they used last year for corn.

Planting his first soybeans recently, Hutchison kept two tractors waiting as he knelt in a bare field, scooping with a trowel for the proper depth for beans.

"Some things you do by hand, even now," Hutchison says. "Ideal for soybeans is three-quarters of an inch deep. Corn can handle anything from 11/2 to 2 inches deep, depending on soil."

Tim Bishop, a grain farmer who works about 1,500 acres in Queen Anne and Talbot counties near Wye Mills, agrees that Eastern Shore farmers are cutting back on corn in favor of soybeans, mainly because nitrogen fertilizer has more than tripled in cost in the past two years. Corn requires 150 pounds of the fertilizer per acre.

"You've always got a lot to worry about with corn," Bishop says. "But here we are with a chance to make a profit, and we get hit with diesel and this whole energy thing."

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