U. S. farmers are aiming for a record soybean crop this year but high costs for fertilizer and other supplies will mean less corn, wheat and cotton, U. S. government data showed March 31.
After two years of booming returns, farmers are more cautious about their planting this year as the global recession hits exports, the livestock sector and the ethanol industry.
Lured by high prices, farmers will plant 76.024 million acres (30.77 million hectares) of soybeans in coming months, the U. S. Agriculture Department said in its annual plantings report. According to Reuters calculations, farmers could bring in a record harvest of 3.2 billion bushels, if weather and yields are average.
“It is principally the high input costs and farmers’ concern about not being able to pencil out a profit” that led to the boost for soybeans, which cost less to grow, said John Schnittker, a private consultant.
But the switch to soybeans out of corn was far less than traders had expected. Farmers are still on track to produce the second-largest crop of corn on record.
“Ultimately, if you looked at what the returns per acre were, corn still trumped soybeans even though farmers are facing higher fertilizer costs and higher seed costs,” said Terry Francl, an economist for the American Farm Bureau Federation.
Farmers may try to minimize fertilizer use this year to save money, which could pinch corn yields, Francl noted.
Corn plantings in the 10 largest corn-growing states will be slightly larger than last year, the USDA said.
“Everyone was talking about corn planting going down sharply because of the high input costs, but it certainly didn’t show in the report,” said Jack Scoville, analyst for The Price Futures Group.
USDA pegged corn plantings at 84.986 acres, down one per cent from 2008, which could produce about 12.2 billion bushels under normal conditions, according to Reuters calculations.
The planting estimates were based on a survey of 86,000 farmers in the first half of March.
USDA forecast wheat area of 58.638 million acres, down seven per cent from last year, suggesting wheat production of 2.1 billion bushels.
The survey was done before severe flooding hit the Red River Valley, a top spring wheat area in Minnesota and North Dakota, which analysts have said could cut plantings in the area by 500,000 acres.
PEANUT PLANTINGS DOWN
Cotton plantings could be the smallest since 1983 as growers react to depressed prices and demand. The USDA forecast area of 8.812 million acres, down seven per cent from last year.
Severe drought in California could hurt rice and cotton plantings in the state, the USDA said. But some farmers who normally plant peanuts will plant more cotton instead, the USDA said.
Peanut plantings are expected to be slashed by 27 per cent from last year’s record because of concerns about demand in the wake of a recent food poisoning outbreak, the USDA said.
Farmers still have time to change their minds about what to grow depending on soil moisture conditions, fertilizer prices and crop returns heading into spring, said Stewart Ramsey, senior agricultural economist with IHS Global Insight.
“We still could see some acreage push and pull,” Ramsey said. “Farmers are making decisions on bigger pieces of their final acreage allocations later every year.”