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Sky-High Crop Acreage Targets Likely A Pipe Dream

The U.S. Department of Agriculture reiterated its projections for record-high combined plantings of corn, cotton and soybeans this spring at its annual Outlook Forum, dealing a fresh blow to crop prices by standing by its projections for potentially record-high crop production in 2011.

But while record U.S. crop-planting estimates are all well and good on paper – and certainly help dowse fears of continued food supply tightness – the likelihood of U.S. growers actually planting record amounts of each major crop is almost impossible in practice given the limited nature of effective arable land.

The USDA’s planted acreage projections call for a combined record of corn, cotton and soybean seedings this spring. High overall wheat product ion est imates also indicate an assumption that U.S. spring wheat acreage will at least avoid a reduction in 2011.

Should these projections ring true, major U.S. spring-planted crops would cover a record 197 million acres in 2011.

U.S. farmers would need to reverse the trend of declining U.S. arable land to achieve that high total. U.S. land dedicated to row-crop production peaked in the early 1980s at more than 290 million acres, and has been on a downward heading since then, failing to top the 250-million-acre mark for more than a decade. Total U.S. cropland, including land for vegetable production, pasture and range, has also declined from a record high of more than 387 million acres in 1981 to below 340 million.

Some productive land has been lost to urban sprawl. According to the USDA’s Economic Research Service, the amount of U.S. land occupied by urban areas rose from roughly 25.5 million acres in 1960 to close to 60 million by 2002, and has kept rising. Urbanization in the corn belt has risen from 3.8 million acres in 1960 to close to eight million by 2002. Urbanized areas have also shown steep increases in the Northern Plains, the Delta States, the Southern Plains and in the Lake States, all at the expense of arable land.

IDLE ACRES, IDLE THREATS

Land conservation programs also have accounted for much of the decline in productive acreage, reducing overall acreage available for active duty. USDA data suggest that more than 30 million acres of potential cropland have been enrolled in reserve programs designed to replenish soil nutrient levels, preserve groundwater levels and offer wildlife habitats.

In theory, these idled acres represent potential productive capacity were they to be brought back and restored to active duty. In reality, however, most reside in areas not suitable for widespread row-crop production, or features challenging terrain that producers would rather not attempt to plant, tend or harvest (but would be happy to receive government payments for keeping reserved.)

In addition, many parcels of reserve acres currently double as bountiful hunting ground, which many growers would be reluctant to give up in favour of an additional field or two of row crops.

Strict reserve program rules also limit land usage flexibility. Many acres are locked into set conservation terms that last several years, and landowners have penalties for early withdrawals.

That said, rising prices have lured some idled areas back into productive contention, with an estimated 4.4 million acres coming out of the reserve program for 2011. Just over one million of those acres reside within the corn belt states of Iowa, Illinois, Nebraska, Kansas, Indiana and Missouri, and so potentially represent an expansion in corn or soybean acreage in that region.

However, given that the maximum total of additional acres taken from the conservation program is less than five million acres for the entire country, the impact of reserve acreage being restored to production should prove minimal on the production picture as a whole.

In all, USDA’s projections for high planted acres of top U.S. crops may accurately capture the motivation of farmers to ramp up output in response to prevailing high prices of food commodities. But the finite nature of productive arable land in key growing areas should constrain overall seedings of each crop, and will likely result in U.S. growers undershooting the USDA’s upbeat projections by the time planters stop rolling.

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U.S.landdedicatedtorow-cropproductionpeaked intheearly1980satmorethan290millionacres, andhasbeenonadownwardheadingsincethen.

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