Even before the 2018 harvest is completed, industry forecasters are looking ahead to cropping acres for 2019. And it appears we’ll be looking at a flip-flop of what we saw this past year, which should serve as a heads up for farm equipment manufacturers and dealers.
According to a Wall Street Journal report, in 2018 for the first time in more than 30 years, U.S. farmers planted more soybean acres than corn. Based on the current economic climate (read Chinese tariffs on soybeans) this trend won’t stretch into the year ahead.
Soybeans inspected for export from ports in the Pacific Northwest — a main U.S. originator of soybeans bound for China — recently stood 82% below their year-ago level. Prices for the oilseeds have dropped 11% this year, according to the report. “Prices will tell you that you would see a significant shift out of soybeans toward corn in the U.S.,” said Soren Schroder, chief executive of grain-trading giant Bunge Ltd. , speaking at a Wall Street Journal conference in September. Some analysts say farmers could convert as much as 4 million acres from soybeans to corn next spring.
In another report coming out of the Dept. of Agricultural and Consumer Economics at the University of Illinois, Todd Hubbs sees the same scenario developing during the 2019-20 marketing year. “Current market conditions support an acreage increase in corn and a reduction in soybeans in 2019. [Corn and Soybean Acreage Prospects for 2019.]
“As we move into 2019, the prospects of large adjustments to crop acreage increasingly focus on soybean acreage. Acreage adjustments in many major growing areas may be in the form of crop adjustments instead of acreage losses. The current price environment across principal crops points to constant or modest changes in total planted acreage in 2019 and holds the potential for less overall soybean and corn acres,” says Hubbs.
He says that “profit margins appear to be shifting away from the expansion of corn and soybean acreage and back to wheat, small grains and cotton in many areas. Current projections by industry analysts place 2019 corn acreage in a range from 90-93.7 million acres. Soybean acreage projections come in between 82.3-87.5 million acres. In essence, if the current margins continue, we may be at the beginning stages of unwinding the acreage shifts seen over the last decade.”
He expects acres to shift to other grains, which he says will be the continuation of a trend that started in the past year. “While soybean and corn acreage decreased in 2018, many crops saw planted acreage increases. In particular, spring wheat, cotton, barley, rye, oats and hay recorded increases. In the main corn producing states during 2018, Missouri, Michigan, Nebraska and Ohio increased corn acreage over 2017 planting decisions. None of those states increased corn acreage by more than 100,000 acres. Decreases in soybean planted acreage came from North Dakota, Kansas, Arkansas, Minnesota and Missouri. As we move into 2019, corn and soybean acreage shifts depend on the evolution of corn and soybean prices between now and planting,” says Hubbs.
Preliminary surveys of farmer’s planting intentions indicate an intention to decrease soybean acreage and increase corn acreage. Using current market prices, projections for corn and soybean acreage place 2019 corn acreage at 91.1 million acres and soybean acreage at 85.7 million acres, according to the University of Illinois researcher.