Heading into the final week of May, U.S. farmers have planted only 46 percent of the corn and soybean acreage that they intended this year, due to the rainy spring. Economist Todd Hubbs of the University of Illinois said on Tuesday the setback to the corn crop “appears set to hit a level similar to a severe drought.”
The last time major drought struck the Corn Belt, in 2012, the fall harvest was 20 percent smaller than USDA projected in May, before extreme heat withered fields from the central Plains to the Ohio Valley, accompanied by persistent dryness in the central and eastern Corn Belt. Corn and soybeans are the two most widely planted crops in the United States and play a large role in the food supply, whether as rations for livestock or as raw ingredients in processed foods.
Some analysts believe the corn crop will be the worst in a century, “with more than 10 percent of acreage lost to sodden ground,” said AgriCensus. Chuck Shelby of Risk Management Commodities told the market news site that “prevent plant” would claim 10 million acres of corn land and 3 million acres of soybean land.
Hubbs said USDA’s projection of a 15 billion-bushel harvest this fall—the second-largest ever—”is much too high.” More than 3.6 million acres—the record set in 2013—are likely to be lost to prevented planting, he said. Late-planted corn yields fewer bushels per acre than corn sown before May 20 in the Midwest. “Reduced acreage and lost yield potential for the 2019 corn crop look to drive prices higher as the wet weather continues to cover much of the Corn Belt.”
The USDA Crop Progress report said 58 percent of corn acreage and 32 percent of soybean acreage was planted as of Sunday, compared to the five-year average of 90 percent of corn and 69 percent of soybeans. In March, farmers said they would plant 92.8 million acres of corn and 84.6 million acres of soybeans this year. Based on the Crop Progress report, they have planted a combined 80.9 million acres of corn and soybeans, with 96.5 million acres to go, if they plant all of the intended 177.4 million acres. Time is running out for corn planting.
“A combination of reduced acreage and lower yields for the 2019 corn crop appears a prudent assumption at this point with the potential for substantial production losses,” said Hubbs. “Uncertainty about the size of the 2019 corn crop will continue for the next few months.”
Iowa Sen. Chuck Grassley told reporters the administration announcement last week of a new round of Trump tariff payments might encourage over-planting of soybeans, the common alternative to corn. Growers will receive a payment for each acre they plant of 27 eligible crops. But they will not be compensated for cropland that sits idle. “I’m not sure that I understand why it was important to announce that before two to three weeks from now,” when the planting season usually is in its final stages, said Grassley.
Agriculture Secretary Sonny Perdue said the USDA withheld details of the new trade payments to keep from skewing farmers’ planting decisions. “That’s why we’ve been very opaque about the details of this plan, other than the amount and how this will come through the counties,” said Perdue on Fox News last week.
Although growers will be ineligible for Trump payments on prevented-planting land, they can receive an indemnity from crop insurers if they purchased coverage earlier this year. Crop insurance is widely used as a risk management tool.