Is corn growing greener beyond Ontario borders? How does corn profitability and cost of production in the province stack up with other growing regions around the world — from the U.S. to South America, Ukraine, and China?
These are some of the questions Ontario Ministry of Agriculture, Food and Rural Affairs business analysis and cost of production specialist John Molenhuis is hoping to answer through Agri Benchmark. This program is a global network of agricultural economists, advisors, producers, and specialists committed to sharing standardized data from 45 crop-producing countries.
On this episode of the RealAgriculture Corn School, Bernard Tobin sits down with Molenhuis to discuss what the survey tells us about corn production in Ontario.
From a size perspective, Canada ranks 11th in corn production worldwide with Ontario farmers growing roughly two-thirds of the country’s production. Molenhuis notes that Agri Benchmark uses annual rainfall as a gauge of the country’s general capacity to produce corn. On this production component, Ontario and the U.S. are highly productive and efficient, but that advantage is somewhat muted when you factor in the ability of China and the South American countries to double crop.
When it comes to input costs — seed fertilizer and pesticides — Molenhuis says Ontario sits about middle of the pack, with China and the U.S. on the high side of the input ledger.
In this category, Molenhuis says it’s important to understand which countries have access to technology. For example, countries using advanced seed trait technology tend to have higher seed costs and lower pesticide costs. An inverse relationship is typically found in countries that don’t use this technology.
Nitrogen costs are of significant interest, notes Molenhuis. He says China and Ukraine tend to have the lowest nitrogen costs on a per unit basis, but this is a direct result of producers benefitting from large domestic supplies and ready local access to the nutrient in these countries. That’s not the case in Ontario. In the model used by Agri Benchmark, Ontario’s nitrogen price at C$1.49 per kg is roughly double that of China and Ukraine. However, Molenhuis notes that producers in Ontario tend to be more nitrogen efficient and the use of 28% UAN liquid fertilizer does allow for tank-mixing with other fertilizers and pesticides to perform more efficient field operations and reduced machinery costs.
When Molenhuis looked at total cost and total profitability, he concludes that China is by far the highest cost producer of corn. The U.S. and Canada/Ontario make up a second tier with the South American countries being the most profitable. Land costs and rent is one of the keys to profitability for Argentina and Brazil as these costs can be spread over two crops annually through double-cropping, Molenhuis notes.
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