U.S. farmers say they will plant the third-largest amount of land to corn since World War II — 93.6 million acres — the first step toward a record-setting fall harvest, assuming normal weather and yields. At the same time, they would sow the smallest wheat area since 1940, according to the USDA’s survey of 83,000 operators.
“The increase in planted acres [of corn] is due mainly due to the expectation of higher returns in 2016 compared to other crops,” said the annual Prospective Plantings report. With ample corn, wheat and soybean supplies already in the bin, the prospect for the year ahead is large crops and low commodity prices that will hold down food prices.
If growers follow through on their plans — the planting season is just beginning so there is time to reconsider — the result could be a crop of 14.4 billion bushels, the largest ever and more than half-a-billion bushels larger than the USDA projected in February. The record is 14.216 billion bushels in 2014.
Growers in the major corn states planned increases of up to 3 percent in plantings, with much larger increases in percentage terms in the Plains, where wheat area would fall. In Kansas, wheat plantings would drop by 700,000 acres at the same time corn area grows 650,000 acres, a 16-percent increase. In North Dakota, corn area would rise 650,000 acres while wheat contracts 950,000 acres, up 24 percent. Kansas and North Dakota are the two largest wheat states and are second-tier corn states.
While U.S. corn plantings would rise 6 percent from 2015, wheat would plunge 9 percent, and soybeans would see only a 1-percent decline. The estimated all-wheat plantings of 49.6 million acres would be the smallest since 48.7 million acres in 1970. Sowings of spring wheat, down 14 percent from last year, would be smallest since 1972.
Corn, wheat and soybeans are the most widely planted crops in the United States. This year’s soybean crop is likely to be the third-largest on record, at 3.8 billion bushels, based on the USDA survey, historical land abandonment rates and trend-line yields. Based on the same assumptions, the wheat crop would be a little over 1.9 billion bushels and the smallest in a decade.
Farm-gate prices for corn, wheat and soybeans peaked during the 2012 drought and have fallen steeply since. They are forecast to weaken again for the 2016 crops. Farm income has fallen in step with commodity prices, so growers face tight finances.
“The [USDA] report really highlights how challenging the market is right now for major crops,” said John Anderson, an economist for the American Farm Bureau Federation. “If we have normal yields, the supply-side pressure will not ease up much.”
Futures prices for corn fell at the trend-setting Chicago Board of Trade on the potential for a larger-than-expected corn crop while wheat futures climbed. Analysts told Agrimoney the adjustment in futures prices could inspire growers to change their crop plans. Cash-short growers also may cut back on fertilizer, with a resulting drop in production, said Chris Narayanan of Societe Generale, who said, “With the specter of a La Niña event still in play, the final size of the U.S. corn crop could yet be below current expectations.”
In the past 20 years, the Prospective Plantings report has overstated corn plantings 13 times and underestimated them seven times. The USDA says the margin of error for corn is 2.6 percent, for soybeans 3.6 percent, and 11 percent for spring wheat.
The USDA will incorporate the Prospective Plantings data into upcoming projections of crop production. The annual Acreage report in June will provide updated data on actual plantings and estimates of harvest area.