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Low prices hinder acreage expansionLow prices hinder acreage expansion

February 8, 2016

5 Min Read
Low prices hinder acreage expansion

LOW prices and poor profit margins should keep expansion plans under wraps for most growers in 2016, according to Farm Futures' latest survey of planting intentions, results of which were released Jan. 21.

While Farm Futures found farmers ready to boost corn acreage this spring, the increase is modest, at 89.5 million acres (Table). That would be up 1.7% from 2015 — which had been reduced substantially by bad weather — but 1.1 million acres below levels achieved in 2014.

Growers told Farm Futures they intend to cut back on soybeans by planting 82.2 million acres, down about 500,000 acres from 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, USDA 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.

The Farm Futures survey suggests that farmers on the Plains will favor corn over soybeans, if they have water available, either through rainfall or irrigation. Plains farmers appear ready to hit the pause button on sorghum expansion, however, after rushing to plant that feed grain in 2015. Sorghum acreage could fall an estimated 2.5% to 8.25 million acres in 2016.

"Sorghum's premium to corn soared to record levels in 2015 after China began buying, but increased production swamped demand, and sorghum is trading at a weaker-than-normal discount to corn in many areas on the Plains," Knorr said.

Spring wheat seedings could see another year of modest expansion this spring. The survey put acreage on the Plains up less than 100,000 acres to 13.3 million. With durum acreage also rising, that could leave total wheat acreage at 52 million, down almost 5% from 2015.

Farm Futures surveyed more than 1,550 growers from Dec. 7, 2015, to Jan. 4. Farmers from all over the country were invited to complete the survey online.

Farm Futures is a Penton Agriculture brand and a sister publication to Feedstuffs.


Planting intentions, spring 2016



% change



from 2015







Wheat (all)






Source: Farm Futures.


Volume:88 Issue:02

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