Shift to soybeans fine for Chesapeake, but may increase consumer prices

The Baltimore Sun

Farmers in Maryland, as well as those across the country, plan to seed fewer acres of corn and plant more soybeans this year, according to a recent report from the U.S. Department of Agriculture.

While that could bode well for the health of the Chesapeake Bay, it may result in consumers paying higher prices at the supermarket checkout counter.

In Maryland, corn acreage is expected to fall 9.26 percent to 490,000 acres this year while corn planting nationwide is expected to drop 8 percent to 86 million bushels.

The 50,000 acres that state farmers are taking out of corn this year appear to be going to soybeans.

According to the federal government's Prospective Planting Report issued during the week, Maryland farmers will be planting 50,000 acres more of soybeans this year than last.

Soybean acreage is expected to total 450,000 acres.

In addition, farmers here reported that they planted an estimated 255,000 acres of winter wheat last fall, up 35,000 acres from the 220,000 planted last year.

Maryland's barley acreage is up 3,000 acres from last year to 48,000 acres. Growers expected to harvest hay from 205,000 acres, down 10,000 acres from 2007 but the same as in 2006.

Nationwide, farmers are expected to plant 74.8 million acres of soybean this year. This is an increase of 18 percent over last year, but still 1 percent below the record high in 2006.

Farmers in neighboring Delaware expect to follow suit. Producers there say they will plant 200,000 acres of soybeans this year, compared to 150,000 acres in 2007. This would be the largest soybean acreage since 2004.

An estimated 145,000 acres of corn is anticipated, down 50,000 from the 195,000 planted last year. This would be the smallest corn acreage since 1989.

Maryland Agriculture Secretary Roger Richardson said he was not surprised by projections in the government report.

"I have been saying since last summer that corn acreage was going to go down because of the cost," he said. "The cost of growing an acre of corn has increased tremendously, at least 30 percent."

Richardson said that a ton of potash fertilizer cost about $600 last year. This year, the cost has risen to $1,000 a ton.

Adding up numbers in his head, Richardson estimated the cost of planting an acre of corn - including the seed, fertilizer, the fuel for the tractors and land rental - at about $500. "Last year, it was about $280," he said.

The price of soybeans was another major factor in the decision of farmers, both here and across the country, to plant less corn this year.

Richardson said that soybean prices have been hovering around $15 a bushel in Maryland this year, up from about $7 a bushel this time last year.

"And soybeans are a cheaper crop to plant," he said.

Last spring, when state farmers announced plans to plant 10 percent more corn than in 2006, environmentalists charged that the extra corn would hurt the bay.

The Chesapeake Bay and the Mid-Atlantic Water Quality Program expressed concern that an increase in corn planting throughout the bay watershed could result in a significant boost in the amount of nitrogen and phosphorus going into the bay.

"Corn is not the culprit," said Richardson "The University [of Maryland] tells farmers how much nitrogen they need to grow 120 bushels of corn per acre. Farmers have nutrient management plans which tell them how much nitrogen the corn can absorb from the ground."

He added: "Fertilizer is very expensive. Farmers don't have the money to put extra nitrogen on their fields. That would be wasteful and cut into their profits."

The USDA report had an immediate impact on commodity prices. Corn reached an all-time high of $6 a bushel on the Chicago Board of Trade last week while soybean prices on the Eastern Shore dropped to about $12 a bushel.

Corn is the primary ingredient in the feed for dairy and beef cows, hogs and chickens. It is made into cereal and corn syrup, which is a sweetener in many products, including soft drinks.

"From milk, to meat, to bread, the overall cost of food is rising twice as fast as the rate of inflation," said Scott Faber, vice president of the Grocery Manufacturers Association.

The high price of corn is also expected to hinder the production of ethanol, a gasoline extender. Ethanol is made from corn and is designed to reduce the nation's dependence on increasingly expensive imported oil.

Agriculture officials say a more than 50 percent increase in the price of corn since last year has had a significant impact on the profitability of ethanol.

In some areas of the Midwest, ethanol production plants that opened last summer have gone bankrupt.

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