U.S. farmers say they will plant some of the biggest corn and soybean crops ever this spring, racing to keep pace with unrelenting global demand that’s rapidly depleting stockpiles and driving up food costs.
A government survey found corn plantings would be the second largest since the Second World War and soybeans the third highest ever. But traders focused on a companion report that showed unexpectedly small stockpiles, sending corn prices up by 4.5 per cent, hitting the 30-cent daily limit for price swings.
“We are not going to run out of (corn and soybeans), but we are in a very tight situation,” said Joe Glauber, Agriculture Department chief economist, in an Insider interview.
The USDA reports underscored that U.S. farmers are reaching the limits of arable land in the world’s biggest crop exporter, with increased corn crowding out soybeans and cotton. Spring wheat sowing, while among the biggest in decades, could yet shrink.
This year’s spring planting season in the world’s biggest crop exporter is being watched more closely than ever by countries fearful that further increases in already record-high food prices could stoke unrest. Traditionally docile U.S. food prices are forecast to rise a sharp 3.5 per cent.
Farmers plan to sow 92.2 million acres (37.3 million hectares) with corn, the most since 2007 and second largest since the Second World War. That’s up 4.5 per cent from a year ago, more than the 4.1 per cent rise that traders expected.
But it will barely replenish stocks drained by strong ethanol and livestock feed demand at home and ravenous demand abroad, including surprise buying from China.
Corn usage was at a record high for the three months ending on March 1, said USDA, with 28 per cent of the 2010 crop consumed.
Soybeans, which have fallen five per cent since hitting a post-2008 peak of $14.50 a bushel in February, will be sown on 76.6 million acres, the third-most ever and down one per cent from last year.
Farmers will sow 253.8 million acres to the eight major crops this year, up 3.5 per cent from last year and the most since 1998. Analysts say this will require double cropping on some land – planting soybeans after reaping wheat in the spring, for instance – or bringing lower-quality land into production rather than leave it fallow or in pasture.