The contest between corn, the longtime leader, and soybeans to be the most widely planted U.S. crop may be closer than initially thought, according to USDA chief economist Robert Johansson. Last fall, the USDA said soybeans would be the clear winner in coming years, sometimes topping corn by 4 million acres. Now Johansson says only that “soybean area will match or exceed corn area for much of the next decade, supported by import demand from China.”
For this year, the USDA projects a tie at roughly 90 million acres apiece for corn and soybeans. That would be a marginal reduction from 2017, when corn’s total of 90.2 million acres was a narrow 100,000 acres larger than soybean’s total. Flat prices will constrain plantings of the crops, said Johansson, who also said wheat sowings will expand modestly after a four-year decline to the smallest number of acres on record. Soybeans have exceeded corn plantings only once, in 1983, when the Reagan administration offered bonus federal support to farmers who idled cropland. The top four U.S. crops are corn, soybeans, wheat, and cotton.
Soybean prices are more robust than corn prices at present, making the oilseed a better bet for a profit. A year ago, a similar price advantage for soybeans fueled a 6 million-acre increase in soybean plantings to the largest total ever.
“However, with acreage of corn and soybeans nearly equal in 2017, is there room for further soybean expansion at the expense of corn?” asked Johansson at the USDA’s annual Ag Outlook Forum. “Or do agronomic and rotational issues limit the ability of soybean area to overtake corn by a significant degree?”
Corn and soybeans are grown in many of the same parts of the country, and farmers often alternate between the two crops. The so-called corn-soy rotation allows growers to hedge the risk of low market prices and to use a variety of herbicides in hopes of preventing weeds from developing resistance to any one of them. Soybeans also “fix” nitrogen — an important corn fertilizer — in the soil.
USDA projections of corn and soybean plantings were in line with traders’ expectations, and lower than the 91 million acres each that the USDA projected last fall. The figures predict a corn crop of 14.37 billion bushels and a soybean crop of 4.3 billion bushels, assuming traditional abandonment rates and trend-line yields. If so, the soybean crop would be the second largest on record and the corn crop would be the third largest.
If wheat growers plant the 46.5 million acres now projected by the USDA, it could translate into a harvest of 1.8 to 1.9 billion bushels.
The value of U.S. farm exports is forecast to be $139.5 billion, down by $1 billion in 2017, said Johansson, in updating the export forecast. Sales would be the fifth highest on record and considerably below the mark of $152.3 billion set in 2015.
Agriculture Secretary Sonny Perdue said “our goal at USDA” is larger farm exports, which generate 20 percent of farm income. Acknowledging anxiety in farm country over negotiations on the new NAFTA, Perdue said he was confident about President Trump’s leadership. “I believe he will, at the end of the day, strike the best deal for the American economy, and that includes agriculture,” said Perdue.
NAFTA negotiations are to resume next week in Mexico City. Agricultural trade is a sticking point, particularly the U.S. demand that Canada dismantle its supply management system for dairy, poultry, and eggs.
Perdue told reporters, “We haven’t seen any direct retaliatory measures yet” by China against ag exports because of U.S. duties on steel and solar panels from China. He said USDA officials are discussing how to mitigate the impact in case China decides to put duties on U.S. sorghum. China recently opened a dumping investigation of imports of the feed grain.