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Central South Dakota | There aren't big profits here, trust me. Lots of guys bouncing around either side of breakeven. My point is if we can include corn in our rotation and you do a good job marketing, you can be profitable with it the year you grow it. Many times, you need the wheat to conserve the moisture to grow the corn crop. So you try your hardest to break even or lose as little as possible on wheat, then you have to cost average the profit off the corn into it. That all has to be taken into consideration.
If you think your going to come out here and plant corn, corn, corn like they do further east, you will be in for a rude awakening and be broke shortly, at least "here". Hence my initial post when I said it gets grown every 3-4 years, sometimes 2 but that's not normal for "here" anyways. It's a system approach that increases our profitability over just wheat that I'm not going to fully explain in this post and the corn helps set the stage for some of the other minor crops we have to grow. Just know almost every year that water will be our limiting factor and every drop is precious to us unlike east further where mile upon mile of tile is laid to try to get rid of it.
The point of my post and my discussion with my friend was to point out that we have learned how to incorporate corn and soybeans into our rotation to help us and the additional acres are not going to disappear in favor of more wheat acres due to the current economic conditions. The other point I was trying to make to him is how will his cost structure have to change because if we can make a little money on corn at a price that is .20-.40 below a producers break even in Iowa. The market still needs your bushels, but how will seed, machinery, chem, fert, land prices have to adjust if the "fringe" can produce just enough bushels to keep the average price of corn below your COP for the extended future. Say my friend grows 200bu corn consistently but his break even on corn is .30/bu above mine. He's got to trim $60/acre just to get to 0 and if he want's $50/acre profit, he's going to need to trim his cost structure $110/acre, so hows that affect the items I list above.
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Fringe acre discussion.........
