Farmers Look for Profitable Crops in 201603/08/2016
In a normal year, small-market crops such as peas and lentils, and obscure crops such as buckwheat and mustard, would receive scant attention from most area farmers.
This isn’t a normal year.
Poor crop prices, particularly for corn, wheat and soybeans, the region’s three major crops, have many Upper Midwest farmers searching for alternatives.
“There’s a lot of head-scratching about what to plant,” says Joe Neaton, an ag producer in Watertown, Minn., about 30 miles west of Minneapolis.
Corn and soybeans dominate ag production in his area, where soil, climate and land costs are well suited for the two crops. The limited alternatives include alfalfa, he says.
Producers in northwest Minnesota, the western Dakotas and eastern Montana have more options. Lighter soil, generally limited rainfall and relatively modest land costs there are conducive to other crops, including pulses such as lentils and dry peas.
But limited seed supplies and marketing opportunities curtail how many acres can be planted to such crops. Seed for some small-market crops already is hard, if not impossible, to come by,
Seed supplies of peas and lentils “have been really tight,” says Emily Paul, eastern sales representative for Pulse USA, a Bismarck, N.D.-based pulse seed company. “There could still be potential (to get seed) if the stars align. We’ll take down their (farmers’) names and the acreages they’re looking to fill. If something changes with a previous order, we’ll get in touch with them. That’s about all we can do right now.”
Paul encourages farmers to remain interested in pulses, even if seed isn’t available this year.
“Don’t rule them out for next year,” she says.
Demand for pulse crops continues to grow, and raising them in a regular rotation with other crops helps the soil, she says.
Keep in mind that few, if any, farmers will shift a lot of acres into small-market crops, even if they can get enough seed. Producers generally have a set rotation in which they rotate a handful of crops on a particular field to minimize problems with disease and insects, among other reasons.
Even so, farmers generally have some “flex” or “discretionary” acres on which they switch crops, depending on prices. By all accounts, minor crops are likely to pick up more flex acres this spring.
Frayne Olson, crops economist and marketing specialist with the North Dakota State University Extension Service, says farmers have been asking all winter about small-market crops.
“It keeps coming up,” he says. “There’s just so much interest.”
Part of the reason is the 2016 profit outlook for soybeans, historically a crop that shows profit potential even when other crops don’t, isn’t promising.
The NDSU Extension 2016 Projected Crop Budgets estimate that soybeans will lose money across the state.
But small-market crops are generating more attention, even in areas such as Montana, where soybeans aren’t grown.
Rob Davis, a Larslan, Mont., farmer says interest in dry peas, a crop he grows, is especially strong right now.
Impact on wheat?
Many Upper Midwest farmers are placing renewed emphasis on wheat, in part because of growing recognition the crop can enhance soil health. One of the still-to-be-answered questions is whether greater interest in small-market crops will hold down wheat acreage this spring.
Reid Christopherson, executive director of the South Dakota Wheat Commission, says he’s noticing more interest in small-market crops, but the extent and seriousness of that interest is difficult to gauge.
“It’s all over the board,” he says. “With all the commodity prices so depressed, it will be a matter of looking at input costs and the projections that are out there.”
Limited supplies of small-market crops will hold down their acres, although it’s difficult to estimate how much, Christopherson says.
Keeping it in perspective
U.S. farmers last year planted 88 million acres of corn, 83 million acres of soybeans and 55 million acres of wheat.
In comparison, about 490,000 acres were planted nationally to lentils, primarily in Montana and North Dakota, putting the crop in the small-market or niche category. For every one acre of lentils planted across the country, 110 acres of wheat were planted.
Mustard and buckwheat account for an even smaller sliver of total U.S. crop acres. Just 50,000 acres of mustard were planted last year in the U.S., mainly in Montana, North Dakota, Oregon and Washington. And U.S. farmers planted only 34,000 acres of buckwheat in 2012, the last year for which U.S. Department of Agriculture figures are available.
Still, the NDSU Extension 2016 Projected Crop Budgets identify lentils, mustard and buckwheat as potentially profitable this year. Extension officials also stress small-market crops bring their own risks and concerns, including obtaining seed and lining up buyers.
Mark your calendars
Many factors, including seed availability, changing crop prices and weather conditions, will determine what crops are planted this spring. For example, wheat is a cool-season grass that typically does best when it’s planted early. Planting delays could lead to acres being switched from wheat to other crops.
The so-called “battle for acres” is another consideration.
Enough acres must be allocated to all the crops grown in the Upper Midwest so the production of each crop will meet demand for it. If the market senses acreage for a crop might come up short, the price of that crop rises to make it more attractive to potential growers.
Farmers and others will have a better handle on planting intentions on March 31, when the U.S. Department of Agriculture’s National Agricultural Statistics Service releases its Prospective Plantings report. The widely watched annual report will give USDA’s best guess on how many acres of both large- and small-market crops will be planted this spring.
Source: Jonathan Knutson, Agweek