B-Team Report for Wednesday, Dec. 5

[Jeff_a_Caldwell]

SW, are you hearing anything out west about folks raising more milo (or sorghum, I guess!)? A friend of mine out in Lane County told me the other day that the folks at the ethanol plant in Colby are switching around to start using sorghum since they recognize it takes less water and they can still pump out the fuel with it. Think that's an answer to the water issues there? I know it's always seemed a little crazy to me when guys try to raise 300+ bushel corn even if it takes them pumping $150 or $200/acre worth of water to do it!

[shortties]

Im pretty sure thats a bullish chart pattern shes got there with those cheerios! Shell be an analyst on market to market soon enough LOL>

[ECIN]

Jeff are you talking about raiseing milo -- because it takes less rain to raise or less water for production ?

[Jeff_a_Caldwell]

Yep. I've heard folks say they can make as much or more raising dryland milo/acre as they can raising irrigated corn, as expensive as it's getting to irrigate. Plus, some folks are already looking at alternatives to pumping like crazy like they had to this year.

[sw363535]

Jeff,

I think it is going to happen, but not much talk of it right now.  But it will and is happening in marginal water areas.  We see more and more "lower cost", "lower water" alternatives in the field.  Cotton in the southwest, and milo.  Crop insurance retards the change.  The alcohol problem is just going to be bushels/ volume.  Milo may not be able to be a good replacement until we see a drought ended.  Volume needs water----simple as that------and you know the state of that issue.

Ecin,

Good article in the sense that it puts real "big" emphasis on the size of the problem.

[sw363535]

Even with good irrig water or good rain.  The milo top end is a step down from corn, ecin.  Say  200-230 corn goes to 150-60 milo at best in good water.

Milo has a "sweet spot" around 110-145 bu.  Half the water of corn, fewer problems----and loves heat.  So the 400 gallon wells that used to be 800 cash flow nicely at these prices.  400 gallon wells or below. the last two years have been insurance claims for corn (0-85 bu).  400 gallon wells  per 125 acres--now make up 40+% of Kansas irrigation---just my wild guess observation--not official----probably(hopefully) will be corrected.

Last couple of years corn acres have been reducing to concentrate water.  And dryland production is non existant this year.  Those alcohol plants will need the rail from the east till this drought ends 

The irony is we(out west) need the drought to hit Iowa and Illinois or we don't get a price increase(we get ignored like 2011 when Russia's problems were more important than ours)------but now that it has our industries (feeding, meat packing, dairy, and alcohol) are going to start wondering why they are out here---at the end of a long rail.

Kansas has some tough issues--------- like everybody else.

[highyields]

In my area SENE I have to haul the sorghum 40-50 miles to a market THEN take a price dock on it compared to corn.  I have never raised sorghum Last year my corn average 70 bushel we had 4 inches of rain from May through July would sorghum have out yielded corn last summer?  

[sw363535]

if you started with a full profile milo should have made a little more but would not have made up for the distance and price issues.

Milo becomes a poor mans corn with no benefits when there is lots of water and very rich soil.  In that environment it will try to maximize and you will not see much benefit-------just my opinion.  There are guys in north central Ks and south of Holdridge that are better versed on your area than I.  That is the area where the milo changes to corn going your way.

Out west  (southwest) we plant it very thin(12.5-13,000 population $2 or less/acre.  If we get our old average of 16-20 inches it will stool out and shoot multiple heads with an 80+ bu potential.  If we get 6 inches of rain it will adjust and still make 40+ depending on the timing of the rain.  This year we got 3 inches and still cut some at 20+ bu/acre.  We fertilize accordingly--- none if it is dry.

It is what milo can do when it is very dry that keeps it popular out west.  Corn won over a lot of the milo acres because of its herbicide tolerance but the cost will be intolerable as production stops.  Thus, Jeff anticipates milo's return-----the original drought tollerant corn.

[GoredHusker]

Coming from someone who's been down this road before, I'd say those converting to milo will be converting right back in a year or so. First of all, milo is not more drought tolerant than corn. This year was a pretty good example. Dryland corn was running 30-50 bushels per acre on summerfallow ground while the summerfallow milo right beside it didn't for the most part even head out. Under irrigation, milo does ok. SW is right that the top end of irrigated milo is around 150 bushels per acre. The math gets pretty basic from there. Even if one uses half the water, their water bill goes to 75-100 bucks an acre rather than 150-200 bucks an acre. However, they're looking at a gross value of roughly 980 bucks an acre growing 150 bushel milo using 7 bucks/bushel corn. With even 200 bushel corn, their gross goes to 1400 bucks. One can already see that the water savings is a pittance with regards to what is given up. Unless milo has changed a lot in the past five years, the herbicide cost will be higher for milo than corn. With all of the fixed costs such as the rent being the same, taxes, etc.; it just doesn't pay to raise irrigated milo. It does make sense if one is under severe water restrictions. I didn't realize Colby had an ethanol plant. I thought it was located east of Oakley. If it's the same plant, they've been primarily using milo for years which is why their wet distillers is red. The reason they favor milo over corn comes down to simple math. Milo has a feed value of roughly 93% of corn which is how it is priced. However, milo used for ethanol production has a value of roughly 95% of corn. Thus, the ethanol plant is able to pay 93% of the value of corn and receive 95% of the amount of ethanol from corn.

[frankne]

Work with her Jeff ,you might not have to work   http://www.youtube.com/watch?v=x0GsNhLt9Ds