U.S. farmers intend to sow a record amount of land to soybeans and pare back on corn planting this spring, the government said in a report that puts the second-largest soybean crop ever and the third-largest corn crop on the horizon. Mammoth crops would mean at least one more year of comparatively low commodity prices after the price peaks of 2012. Abundant supplies would help hold down food price inflation.
Based on a survey of 84,000 operators during the first half of March, the USDA estimated soybean plantings at a record 84.6 million acres, up 1 percent from the 2014 record, while corn plantings of 89.2 million acres would be down 2 percent and the smallest in five years. “The reduction in planted [corn] acres is mainly due to the expectation of lower prices and returns in 2015,” said the Prospective Plantings report. For months, analysts have said soybeans, with lower production costs, were more likely than corn to turn a profit for growers.
Based on average abandonment rates and USDA projected yields, the soybean crop could total 3.85 billion bushels and corn could total 13.6 billion bushels. The soybean crop would be second to the 3.969 billion bushels of 2014 and corn would rank third behind last year’s record of 14.216 billion bushels and the 13.829 billion bushels of 2013.
The wheat crop could total 2.1 billion bushels, an average amount, based on plantings of 55.4 million acres, down 3 percent from last year. Corn, wheat and soybeans are the three most widely planted crops in the United States.
The Prospective Plantings report tends to slightly overstate corn plantings and underestimate soybean seedings. The margin of error for corn is +/- 3.3 percent, and for soybeans it’s +/-3.6 percent. For corn, that is a leeway of 2.9 million acres while the year-end figure for soybean area could vary by up to 3 million acres.
Analysts had expected larger soybean plantings and smaller corn area than the USDA forecast. They also expected the quarterly Grain Stocks report, released at the same time as the plantings forecast, to show a smaller corn stockpile than the 7.74 billion bushels listed by the department.