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Grain and silage needs boost Oregon field corn production

It has been rare the past couple of decades for a new agricultural commodity in Oregon to crack the coveted top ten list in terms of sales or production value. The same 10 commodities routinely show up year after year. But thanks to increased acreage and high prices, field corn grown for grain and silage has joined the party, ranking ninth with a value of nearly $109 million in 2011.

“We’ve had a sizable increase in acreage the past few years here in Oregon plus a nice increase in price, add that together and it shows that the value of corn for grain and silage being sold has increased tremendously,” says Chris Mertz, state director of the Oregon field office of the US Department of Agriculture’s National Agricultural Statistics Service (NASS).

Statistics generated by Oregon State University and NASS confirm the phenomenal growth. In 2000, the amount of corn for grain harvested was at 5.2 million bushels and 29,000 acres. In 2009, that had jumped to 8.6 million bushels and 36,500 acres. In 2010, it had grown to 10.1 million bushels and 44,900 acres. Last year, production hit 14 million bushels and 57,700 acres.

Corn grown for silage has increased just slightly the past dozen years. The amount harvested last year in Oregon was 618,000 tons and 21,750 acres.

Sweet corn, consumed by people and grown for either processing or the fresh market, is counted as a separate commodity. It’s production value in Oregon hovers around $33 million and is not ranked nearly as high as corn grown for grain and silage.

When you combine all the field corn grown in Oregon– for grain or silage– the 2011 numbers are enough to boost it onto a list usually reserved for such agricultural mainstays as beef, wheat, onions, and potatoes. The production value of corn for grain or silage over the past two years has more than doubled– going up 111 percent. There is one simple explanation for the recent increase.

“In Oregon, most of the corn is being sold for feed to help support our dairies and feedlots,” says Mertz. “Feed costs have gone up tremendously for all livestock producers in the country. Oregon is no exception. Right now, it appears to be much cheaper to grow field corn locally or source it locally rather than typically hauling it in from the Midwest and face all the transportation costs.”

Those skyrocketing feed costs are reflected in the price now paid for field corn. The price last week was more than $8 a bushel, which is an all-time high on the Chicago Board of Trade. Prices have the potential to still go up this season as supply and demand impacts all of the nation’s corn industry. Last year’s average price for corn grown in Oregon for grain was $6.95 per bushel compared to $5.03 in 2010, $4.23 in 2009, and $2.40 in 2000. The increase in price appears to parallel the expansion in acreage and production of field corn in Oregon the past decade.

“As row crop farmers choose what crops to grow, they look for ones that have demand and can turn a profit,” says Jim Krahn of the Oregon Dairy Farmers Association. “Corn is one of those crops this year. There is going to be a large demand by the livestock industry for both grain and silage.”

But for many dairy or feedlot operators, growing the corn themselves is not about dollars, but sense. They hope to profit by reducing feed costs while providing a good source of feed for livestock.

“If livestock producers, including dairies, have the land available to grow corn, without question they are,” says Krahn. “There is an estimated 2,000 acres or more being grown in Tillamook County. Four years ago, there was none. This is being done to reduce the cost of purchased corn. Corn is a valuable source of starch in a cow’s diet. It is very difficult to replace with other grains and maintain the same level of milk production.”

While there is considerable field corn grown in Malheur County and a relatively small amount grown in the Willamette Valley, North Central Oregon is showing the greatest increase in production of corn for grain and silage. Nearly 60 percent of the state’s field corn acreage is in the area that includes Morrow and Umatilla counties. That is also the location of Oregon’s largest dairies and beef cattle feedlots.

“A portion of the growth in that part of Oregon is to service the dairy and beef cattle in the area,” says Krahn. “Again, the price of corn is what is driving this change. A diary producer is raising the corn in an attempt to lower feed costs. If a row crop farmer is growing corn, it’s an attempt to raise profits per acre.”

Throughout the country, corn is grown where the livestock are being fed. With so much beef, dairy, hog, and poultry production taking place in the Midwest, it makes sense that so much of the nation’s field corn has traditionally been grown in the farm belt states. In recent years, a huge amount of corn has been used to produce ethanol. While Oregon now has ethanol plants, most of the corn used for production has been shipped in from the Midwest. Oregon’s field corn increase in recent years has not been tied to the state’s ethanol production.

This year’s devastating Midwest drought has a tremendous impact on corn production in that part of the nation. That could give Oregon producers an even greater reason to plant corn of their own in the near future.

“It does create a bigger need for local corn production today, what happens in the future, no one knows,” says Krahn. “By growing more corn, a dairy producer doesn’t need to rely on someone else to supply it at a very high cost.”

The meteoric rise in production of corn for grain and silage in Oregon the past decade has nothing to do with today’s Midwest drought. But with feed costs gradually– and sometimes sharply– increasing since 2000, both row crop farmers and livestock producers who have available land and enough water for summer irrigation have been convinced to grow field corn. It appears to be a wise investment.

Still, Oregon pales in comparison to other states when it comes to field corn production.

“It’s nice to say that Oregon had 83,000 acres of field corn planted last year,” says Mertz. “But there are seven counties in the US that planted more than 300,000 acres of field corn. Oregon has a ways to go.”

For more information, contact Chris Mertz, OASS, at (503) 326-2131.

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