The U.S. Department of Agriculture released a report last month predicting fewer corn acres and more soybean acres this year compared to 2007. However, K-State agricultural economists no longer believe the report’s numbers to be valid.
Mike Woolverton, a K-State Research and Extension agricultural economist, said he thinks more corn acres and less soybean acres will be produced than the report predicted.
According to the USDA Web site, the prediction estimates are made through surveys given to about 86,000 farm operators during the first two weeks of March. The USDA planting intentions report was released March 31, and it predicted corn growers would plant 86 million acres this year, an 8-percent decrease from last year. “Expected [corn] acreage is down from last year in most states as favorable prices for other crops, high input cost for corn and crop rotation considerations are motivating some farmers to plant fewer acres to corn,” the USDA report said.
The USDA also reported an 18-percent increase of soybean acreage, and if the numbers for soybean acres in 2008 are correct, the planted acreage in Kansas “will be the largest on record.” Woolverton said people were surprised by the report’s numbers.
“I think they were a little bit shocked,” he said. “People didn’t believe the number; they thought that was way too low. No one really disputed the soybean acreage projection, but they thought it was off on corn acres.”
While the survey was given during the beginning of March, Woolverton said the farmer’s situation had changed by the end of the month.
Art Barnaby, professor in agricultural economics, said changes in the market have affected the predictions since the report was released.
Crop soybean prices were reduced, while new crop corn bids increased, he said.
“It is a safe assumption that farmers will respond to the higher bids and plant more corn, unless wet weather prevents the planting,” Barnaby said.
Woolverton said the industry thinks about 90 million acres of corn will be planted – still down 40 million from last year – and about 76 million acres of soybean will also be planted. However, there could be other setbacks for corn.
“We’re having a wet-cold spring that’s delaying the planting of corn,” Woolverton said. “Corn planting should be a little underway right now, but it’s just barely beginning in most of the corn belt, because it’s colder than farmers would like.
“If we delay much longer, it reduces the yield potential. If this rainy, cool weather continues, what will happen is they’ll still plant, but they won’t plant 90 million acres and they’ll result to soybeans.”
Woolverton said corn seed price is high right now and farmers look at the anticipated selling price.
“Right now that’s not the major issue,” he said. “Right now they’re looking at getting the seed in the ground. It becomes a physical aspect rather than economical.”
Woolverton said the numbers for corn acreage are low, though not the lowest the country ever has seen. But it is causing concern among corn users.
“The corn prices are remaining high,” Woolverton said. “They’re really counting on a good harvest in the fall.”
If the report were true, Woolverton said there could be a possibility of a corn shortage. Though it is believed the numbers are higher than reported, if the corn is planted late there could be a relative shortage of corn and the prices will remain high.
Barnaby said farmers can plant corn without a reduction in their crop insurance coverage until May 31, but if the wet weather continues and they are unable to plant their corn, it is likely they will plant soybeans instead because the final planting date is June 15.
He said if weather prevents the planting of soybeans by that date, then farmers have a choice – they can either take reduced crop insurance coverage for every day they are late or they can make a prevented planting payment claim on their crop insurance contract. While the USDA does a good job collecting data and reporting it each year, Woolverton said many factors like prices change day by day.
“This is sort of the nature of these things,” he said. “The actuality is different than the forecast.”