Managing Corn Seed Costs

Joe Lauer and Trent Stanger
Corn Agronomist and Research Assistant

Seed costs have dramatically increased over the last few years. The development of transgenic hybrids and the associated technology fees has driven the cost of hybrid seed to the highest prices ever seen. It is not unheard of for seed of high-performing premium hybrids to cost $160-$180 per bag, whereas 10 years ago, premium seed would run about $80-$100 per bag. Getting a handle on what the true value of a transgenic hybrid means to farm profitability is challenging.

In addition, this year farmers are concerned about the cost of all inputs for corn production. High energy prices have increased fertilizer price and there is concern about gasoline/diesel/LP for field operations and grain drying after harvest. Minimizing field operations (especially moving towards no-till), early planting date, and appropriate hybrid maturity selection are management options that reduce energy costs. For a discussion on optimum corn hybrid maturity in Wisconsin see:

The underlying philosophy of the following guidelines is to maximize grower return to plant density as seed costs continue to increase. These guidelines are based upon research data collected in Wisconsin over the last five years and help growers adjust their plant densities and maintain or enhance farm profitability depending upon their farm situation. Not only has the economics of seed cost been changing, but the yield response of corn to plant density has been increasing over time. But ultimately, optimum plant density is affected by both seed cost and corn price.

Placing a value on seed is relatively easy in that the price of seed is known at the time of purchase and the amount used is known after a field is planted. The realistic value of grain will vary depending upon the producer�s ability in marketing the grain. Corn grain that will be used on farm as livestock feed should be valued at the price it would cost to purchase if feedstocks run short.

Table 1 describes seed:corn price ratios for seed costs ranging from $40 to $220 per bag and corn prices ranging from $1.00 to $3.50/ bu. As seed costs increase and/or corn prices decrease the seed:corn price ratio increases. Conversely, as seed cost decreases and/or corn price increases the seed:corn price ratio decreases. Currently, most seed:corn price ratios range from 0.33 to 1.50. For example, the seed: corn price ratio at $2.00/bu corn ranges from 0.50 to 1.13 for $80 to $160 per bag of seed.

For a seed:corn price ratio of 1.0, the economic optimum plant density (EOPD) is 33,000 plants/A and grower return is at a maximum of $159/A for each $1.00 of corn price (Figure 1). If $1.00 is subtracted from the maximum grower return ($159 - $1 = $158), the range in plant density is 29,500 to 36,600 plants/A (error bars). As corn price increases, grower return increases proportionally, but the EOPD of each ratio does not change. For example, if the seed:corn price ratio is 1.0, the EOPD is 33,000 plants/A resulting in a grower return of $159/A at a $1.00 corn price. If the corn price = $2.50 then grower return = $159 x $2.50 = $398/A.

As seed costs increase and/or corn prices decrease, the optimum harvest plant density decreases, (i.e. EOPD for ratio of 1.50 = 29,800 plants/A). As seed cost decreases and/or corn price increases (ratio = 0.50) the EOPD increases to 36,200 plants per acre. If seed cost is not considered (ratio = 0.0), then the EOPD estimates yield and is 39,400 plants/A.

Guidelines for choosing an appropriate plant density for corn

1. Currently, seed:corn price ratios range from 0.33 to 1.50.

2. The EOPD for seed:corn price ratios between 0.5 and 1.5 is 29,800 to 36,200 plants/A. The plant density of 32,700 plants/A is within $1.00 of the EOPD for ratios between 0.5 and 1.5.

3. Grain yield continues to increase through plant densities of 39,400 plants/A.

4. In general, silage yield continues to increase as plant density increases. However, a trade-off exists as measured by Milk2000 where quality decreases with increasing population. Thus, the EOPD is the same for corn grown for silage or grain. Corn silage is often more valuable than grain and so the EOPD follows more closely seed:corn price ratios less than 1.0.

Table 1. Price ratio of seed:corn (i.e. $/1000 seeds � $/bu corn).
Price of seed Price of corn ($/bu)
$/80 K bag $/1000 seeds $1.00 $1.50 $2.00 $2.50 $3.00 $3.50
$40 $0.50 0.50 0.33 0.25 0.20 0.17 0.14
$60 $0.75 0.75 0.50 0.38 0.30 0.25 0.21
$80 $1.00 1.00 0.67 0.50 0.40 0.33 0.29
$100 $1.25 1.25 0.83 0.63 0.50 0.42 0.36
$120 $1.50 1.50 1.00 0.75 0.60 0.50 0.43
$140 $1.75 1.75 1.17 0.88 0.70 0.58 0.50
$160 $2.00 2.00 1.33 1.00 0.80 0.67 0.57
$180 $2.25 2.25 1.50 1.13 0.90 0.75 0.64
$200 $2.50 2.50 1.67 1.25 1.00 0.83 0.71
$220 $2.75 2.75 1.83 1.38 1.10 0.92 0.79

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