COLUMBUS, Ohio -- High soybean prices and low input costs won out over the demand for ethanol production in U.S. farmers' decisions to plant more soybeans and less corn this year.
According to the U.S. Department of Agriculture, in its prospective plantings report released the end of March, U.S. growers intend to plant 74.8 million acres of soybeans, up 18 percent from last year. By comparison, they intend to plant 86 million acres of corn, down 8 percent from last year's record-breaking production. In Ohio, growers intend to reduce their corn acreage by 500,000 acres over last year, and increase their soybean acreage by 350,000 acres.
Matt Roberts, an Ohio State University Extension agricultural economist, said that analysts expected corn growers to reduce their acreage, but the high number of acres potentially going into soybeans was a surprise. Still, Roberts expects some shifting between the two crops as planting draws near.
"The key thing to remember is that this report is based upon a survey that was carried out the first week of March, and meant to indicate what planting intentions were as of March 1. Since that time, soybean prices have fallen more than corn prices have. If we ran that same survey today, most analysts would agree that we would not see as big of a shift into soybeans," said Roberts, with the Department of Agricultural, Environmental, and Development Economics. "Most analysts believe we will see some moderation in those prospective plantings report numbers. Growers probably won't plant as much soybeans, and will probably plant a little more corn. The question becomes just how much more."
This year's intended corn production remains high compared to recent standards due to the continued demand for ethanol, but more attention has turned to soybeans because of high market prices and low production costs compared to corn.
"The margins for the soybean prices have gone up more than corn prices have (currently $12 at the Chicago Board of Trade compared to $6 for corn), and high fertilizer prices along with the fear of fertilizer availability for corn have driven growers to plant more soybeans, which have lower input costs," said Roberts. "We are also comparing this year's corn numbers against last year, which was an odd year in which corn acres skyrocketed. Last year really wasn't a typical year for corn."
Growers and economists alike will be eyeing this spring's weather and its impact on planting as that could cause a shift from fewer soybeans to more corn. The current situation with lower soybean seed quality and the potential for a seed shortage could also have an impact on intended soybean plantings.
"The availability of soybean seed and its quality will certainly have some effect, most particularly if we stay wet or run into some other problems during planting. The reason is soybean seed availability is very tight," said Roberts. "The most desirable seed or the seed with the best genetics has been sold out for months, so we are scraping the bottom of the bucket in finding available soybean seed. The biggest impact will be in areas that would have to replanted."
Roberts said that growers may also bump up their corn acreage to cover the global demand of animal feed in the wake of a wheat crop shortage.
"There's a lot of tightness in the wheat market due to stronger food demand and poor weather in some major growing areas," said Roberts.
Farmers are planting more wheat this year compared to last year. According to the USDA, 46.8 million acres of wheat will be planted across the country, up 4 percent from last year. Of this total, 32.5 million acres are hard red winter wheat and 10.7 million acres are soft red winter wheat. In Ohio, soft red winter wheat acreage is estimated at 1.02 million acres, 200,000 more acres than last year.
"The main reason we saw a big jump in wheat planting is the prices last fall, and they've only gone up from there," said Roberts, adding that a successful wheat crop could soften the blow consumers are feeling in high food prices. "The kind of wheat really driving the food price issue is hard spring wheat, which is the wheat we've seen the biggest shortage of globally. The real question is going to be how well wheat harvest does in Kansas, Oklahoma, Texas, the Dakotas, and other areas that grow hard spring wheat."
Hard spring wheat is generally used for making flour and bread. By contrast, soft red winter wheat, typically grown in Ohio, is used in crackers and cookies. Roberts indicated that a successful soft red winter wheat crop might help bring some relief to high consumer prices because the wheat is occasionally blended with hard wheat, but he doesn't expect it to have a big impact.