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Study: Yields May Plateau Due to Dry Soil, High Inputs

Increasing plant population density will be critical to growing yields in U.S. corn production, but increasing this density will be dependent on the economics farmers face as they seek to increase yields, according to a new report released earlier this month by researchers at the Rabobank Food & Agribusiness Research and Advisory group. The report finds it likely we'll see one to two years of stagnant plant population growth due to high input costs and dry soils in the U.S.

"Corn Yield growth in U.S. is reaching a key milestone as the trend of increasing plant population per acre is challenged by limitations of the current production processes," notes Sterling Liddell, Vice President with the Rabobank FAR.  "We know the confines of current equipment and production techniques will eventually challenge the ability of U.S. farmers to sustain historic yield growth trends. Trends our global population is demanding. "

FAR notes that each of these factors could present serious challenges to long term growth in the corn yield curve. However, taken together, these obstacles are capable of severely restricting yield growth potential over the long term.

"Changes in production methods take place gradually," Liddell says. "As these changes are being implemented, growers continue to be keenly aware of increasing input costs and land values, making each decision more and more critical to maintaining a profitable operation."

Much of the equipment needed to drive the industry toward structural change exists. The bottle neck for increasing corn yields rests more on farm economics driving change rather than the technology requirement to produce at more dense population levels. 

In addition, the report finds a shift toward spring nitrogen application will create additional demand for urea. Specialty fertilizers, particularly nitrogen extenders, are likely to see increased demand as farmers attempt to make nutrients more available throughout the growing season. In addition, decreased plant-to-plant spacing will necessitate increased precision in planting equipment

As a result of technology developments, seed and equipment manufacturers have expressed confidence that the rate of growth in yield can double over the next 10 years. Although technology is constantly improving, the only feasible way of accomplishing this goal will be to nearly double the rate of plant population growth.

"The burden ultimately lies with farm input and machinery companies being able to demonstrate the positive economic returns of a steeper investment in costs and educate farmers to optimize production practices under much denser conditions," Liddell says.