A strong 2019 corn crop and the latest on hemp

Yellow gold. That’s what I think of when I drive past Sussex County cornfields with green and red combines cutting through dense walls of stalks heavy with dried ears.

When a farmer pulls alongside a semi rig parked in a partially cut field and begins auguring shelled corn from the filled combine’s hopper, the image transforms into molten gold flowing into the open trailer.

At $4 a bushel – a conservative price estimate for this year – that molten gold will translate into well over $100 million in corn sales for Delaware’s farmers in 2019. That’s much better than in 2018, when extraordinarily high rainfall put a heavy damper on yields.

This year’s corn harvest is about 99 percent complete. According to Delaware Department of Agriculture statistics, Delaware farmers planted 190,000 acres with corn in 2019. As of Oct. 1, 180,000 acres had been harvested with an average yield of 150 bushels per acre for a total of more than 27,000,000 bushels.

Ken Bounds, Delaware’s deputy secretary of agriculture, said this week that the Sussex corn crop – overall – was good this year. “Especially on irrigated ground,” said Bounds. “Some farmers were harvesting in the upper 200s bushels per acre on irrigated fields. But corn on non-irrigated fields in some parts of the county didn’t do so well. Some of them are getting less than 100 bushels per acre. Those hot days over 90 degrees early in the season hurt pollination, and the lack of rain in August added to the trouble. But those with irrigation did pretty well.” 

More than half of Delaware’s estimated 530,000 acres in agricultural production are located in Sussex County. Of those, somewhere around 40 percent have irrigation for corn and soybean production.

Bounds said Delaware continues to push for more irrigation. “Irrigation assures a more reliable revenue stream, it guarantees removal of nutrients spread on the crops which is good for the environment, and it’s the best form of crop insurance. Irrigation just allows more precise management.” He said Delaware has programs to help farmers with the cost of irrigation, and Delaware Electric Co-op is now offering a program to help farmers convert their irrigation systems from diesel to electric power. “That’s also better for the environment and is easier to maintain.”

Jeff Wells is part of a family-farming operation that tills thousands of acres around Milton and Milford. He said the 2019 corn crop has been pretty good. “It could always be better. Things got dry in August and that hurt us, but our irrigated acres did well.”

I asked Jeff about the corn prices in 2019 so far. He laughed. “Not bad, but they could always be better too. We’re 30 cents per bushel higher than last year, but I’m thinking they might get stronger. The Midwest harvest is three or four weeks behind where it should be by now. We’ll have to see how that comes in and what effect it will have on prices. They got a late start due to weather and that may affect their yields. Still, what we have this year is far better than what we had last year. It was too excessively wet last year. It was the worst crop we had in years. Yields were way down. Too much water is worse than not enough. Disease hurts in those conditions.”

Bounds checked corn prices on Monday: $4.17 per bushel. “The price has been bouncing around from early harvest to now. That’s an OK price.”

Delaware farmers get a better price for their corn than do Midwest farmers because of the poultry industry. Every bit of Delaware corn goes to feed chickens, so transportation costs are minimal. Midwest farmers receive less for their corn because transportation costs are higher for the buyers.

Hemp and Delaware

The newest crop in Delaware is hemp, the marijuana-like plant valued for its strong fiber and for its medicinally valued CBD oil. The national farm bill passed in December 2018 allowed farmers to start growing hemp commercially. Hemp farming had been outlawed for many years due to its relationship to marijuana. But hemp cultivation is now permitted so long as its THC content is below .3 percent. THC is the psychoactive chemical compound in marijuana that gets people high. That makes the government nervous.

Delaware decided to make 2019 a research year for hemp production and accepted applications from farmers who wanted to grow up to 10 acres, either in greenhouses or outdoors in fields. “We’re still awaiting federal regulations before we open hemp farming up completely,” said Bounds.

He said there were 24 or 25 applications this year. “I think we ended up with 18 farmers growing hemp this year, some of them in Sussex. Most of it is being grown for sale to CBD oil extractors.” CBD oil is touted as a dietary supplement effective in treating a wide range of maladies including inflammation and related pain.

“I’m advising farmers interested in growing hemp to pay close attention to their business and agronomic planning,” said Bounds. “Some farmers have made good money, but there are many variables. It’s early and we don’t know how much market there will be. There are challenges, such as how dry does the crop need to be, how will it be stored? What kind of cash flow will there be? Quality of available seed. And I know farmers are experimenting now with how to harvest and transport their crop.”

In the meantime, CBD oil is being sold in all kinds of outlets including convenience stores, beauty salons, doctors’ offices and drugstores. Those with any experience in growing cannabis – the plant from which hemp and marijuana are derived - know that it literally grows like a weed and is highly productive.

That has lots of implications for supply and demand, with parts of the country where marijuana has been legalized for recreational use already awash with the plant.

As Bounds said, when it comes to growing hemp and gauging the emerging market, it’s a time to be careful. “I suggest that those who are interested inch their way in,” he said.