Do not sow corn, wheat, rapeseed – this is not the way
Corn in pre-harvest offers is priced at PLN 460-510/t. We are of course talking about wet corn. These are not stunning prices. What's more, they are not even particularly satisfactory. While it is obvious that prices are dictated by the market, the costs are less obvious. Some say: don't sow corn . But the same can be said about other crops, where the costs are disproportionate to the valuations of agricultural ice cream: don't sow grains, don't sow rapeseed . Don't plant potatoes, don't sow beets. While root crops look better against the grains, things are not so rosy in these crops. Potato growers know well that the price has often been tragic. It will soon turn out that this can be said about all crops. So it is not a solution to say to change the profile of the farm. If farmers start switching to other crops in a big way, then the potential niche there will be quickly filled. But let's look at the costs in corn.
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How much is wet corn this season?
High costs of corn production
Let's start, perversely, from the end. The harvest itself will probably cost 450-500 PLN/ha. Due to its tonnage, corn is also more expensive to transport, i.e. more transport is needed for the same area. For example: assuming that the grain is unloaded immediately onto trucks, in the case of wheat, which spreads 7 t/ha on an area of 10 ha, we get 70 t. In the case of corn, with a yield of 10 t/ha, we have 100 t. In the first case, it is enough to load three cars, in the second we need 4 vehicles. There are situations when companies offer both mowing and collection of grain. Let's assume that the total cost of mowing and transport is 750 PLN/ha. Assuming a price of 500 PLN/t, this is the equivalent of 1.5 t of corn.
As for strictly agrotechnical factors, let's assume the seed cost at PLN 800/ha (seed unit price PLN 500 x 1.6 = PLN 800). That's over 1.5 tons of grain.
Herbicide protection at the price of PLN 200/ha has a small share in the total outlays, because the total equivalent in this example is 0.4 hectares of maize.
Fertilization will of course cost much more. With a urea dose of 250 kg/ha (at a purchase price of PLN 2,000/t), the cost of application is PLN 500/ha. In this example, let's also assume the application of NPK 6-20-30 fertilizer at a dose of 220 kg/ha. With a purchase price of PLN 3,000/t and such a dose, the cost of its application is PLN 660/ha. The total cost of fertilizers is PLN 1,160, or 2.3 tons of grain. Of course, in many cases, fertilization was more expensive, because there are so many combinations (whether higher doses of urea or PK or NPK fertilizers).
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Wet corn from 450 to 510 PLN per ton. And what are the prices of other cereals?
Generally, even if we apply lime once every 2-4 years, its cost should be divided into seasons in which it is to "work". And so, assuming that the cost of applying lime is PLN 500, once every two years, in this example, lime is the equivalent of 0.5 tons of grain.
We will assume the fuel cost at PLN 700/ha, or 1.4 tons of grain. The previous costs total 7.6 tons of grain, or about PLN 3,800/ha. But we must also add the depreciation of machinery. This is the cost that often raises the most controversy. Because the equipment we have is different, but they have one thing in common: everything wears out and the machinery must be repaired, serviced, and operating costs must be paid. In this example, we will add PLN 1,000 to a hectare. It is impossible to precisely determine these costs, because they will be different for each farm. To be honest, there will be farms where maintaining the machinery is much more expensive, but also those where the threshold of PLN 1,000/ha is practically the upper limit.
10 tons for costs?
The total outlay in the above example is PLN 4,800. A lot or a little? Generally, for most farms in Poland, this outlay will be similar in the case of corn production for grain, although it should be emphasized here that this is not so much an economic outlay as one focused on the so-called standard yield. Fertilization for 15 t/ha is not included here. Protection can also be more expensive, but also cheaper, because on the market we can find protective combinations cheaper than PLN 200/ha. The situation is similar with seeds, which on average will actually cost about PLN 500/ha, but there are also cheaper varieties (as well as more expensive ones). However, what does such a cost estimate indicate? Well, even in the case of moderate outlays, corn production is not cheap. So similarly to the case of cereals or rapeseed. Here too, the break-even point is set high.
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How much does corn on the stand cost?
With a yield of 10 t/ha we obtain (excluding subsidies) PLN 5 thousand in revenue per hectare. At the same time, the costs incurred here amount to PLN 4,800. So we have a symbolic net income (without subsidies) of PLN 200 per hectare. A higher yield, at the level of 12 t/ha, gives an income of PLN 1,200. After all, corn gives a net income only from 9.6 t/ha. Of course, if we managed to manage the cultivation relatively economically, this threshold will be set lower. However, there is certainly no chance to manage a corn plantation well and effectively below certain outlays – such a symbolic limit can be assumed as PLN 4 thousand. On the other hand, it is difficult to manage a plantation for less than PLN 5 thousand if it were to yield around 15 t/ha (unless we have a site and the weather was exceptionally favorable).
Note that in the above example we did not assume losses for grain moisture content above 30%. Deductions in this category will most likely range from PLN 10 to PLN 20/t (for each percent above the norm). So, for example, with moisture content of 35 percent, you can lose PLN 50 to PLN 100/t.
Unfortunately, many corn plantations are in very poor condition and it will be difficult to achieve a yield of even 9-10 t/ha. At current costs, lower harvests will mean a negative net result, in fact it will be a loss.
Unfortunately, corn, if nothing changes on the market, will not be more profitable than cereals this season. So we have another season, not only in Poland, where the plant grown on a very large scale allows for obtaining only small financial surpluses. And even that in the case of no drought. And this is after all affecting many regions this season again.
World prices are the deciding factor, but it is the European farmer who cannot afford the costs
So once again. With not too high outlays of 4.5-5 thousand PLN, we only get a small financial surplus with 10 t/ha. The situation is analogous to the one we know from the wheat market. We have to produce more and more to get the same money from the same area as before. But is this the way to go? Doesn't this scale of production itself cause a vicious circle? The world is growing in population, so theoretically we also need more food. And in fact, consumption is not smaller at all. The problem lies in the costs. Even if Brazil, Argentina, Ukraine or Russia sell corn for the same amount of money, more will still remain in the pockets of local farmers. World prices are the deciding factor, we have to agree with that. But production costs in the EU are already so high that the problem lies there. There is still some time left until the harvest of corn for grain. It has already happened that despite the not-so-good prices earlier, they rose during the harvest. We can only hope that this will be the case this year as well.
