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Lower prices and poor profit margins limiting expansion of crop acreage.
January 21, 2016
Farm Futures’ latest survey of planting intentions revealed that farmers are planning to increase corn acreage this spring to 89.5 million. This would be a 1.7% increase from 2015, which was reduced substantially by bad weather, but 1.1 million acres below levels achieved in 2014.
Growers told Farm Futures they plan to cut back on soybeans, with intentions to plant 82.2 million acres, about 500,000 below 2015. While flooding also set back soybean seedings in 2015, economics may keep growers from taking another crack at soybeans with that ground.
“Neither corn nor soybeans is showing a profit based on current 2016 crop prices, but corn has better potential to break even this year,” said Bryce Knorr, Farm Futures senior grain market analyst. “Farmers are beginning to recognize this, even though corn will require more cash flow in a tight year to plant due to higher production costs.”
Those tight margins should keep farmers from boosting overall acreage much, said Knorr, who expects more land to go into forage crops or lay fallow unless markets improve.
One big question facing the markets is what will happen to winter wheat ground that wasn’t seeded last fall. On Jan. 12, the U.S. Department of Agriculture reported a 2.85 million-acre drop in seedings. While growers in the Midwest boosted acreage, wet weather kept farmers in the South from putting in fields. Low prices appeared to discourage farmers on the Plains from sticking with wheat.
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