Market Expectations Overshoot Projected Crop Plantings

March 31, 2009

COLUMBUS, Ohio -- Corn acreage in the United States is down and soybean acreage is up for 2009, according to the U.S. Department of Agriculture Prospective Plantings Report. But the shift is not as great as the markets expected.

Matt Roberts, an Ohio State University Extension economist, said that high fertilizer prices, high input costs for corn, and poor fall weather for Western Corn Belt states didn't have much impact on farmers' decisions to take large acres of corn out of production.

"The thing that is most striking is that all of the reasons that a lot of people were thinking that would drive a large reduction in corn acres really haven't had a lot of impact," said Roberts, an associate professor in the Department of Agricultural, Environmental, and Development Economics within the College of Food, Agricultural, and Environmental Sciences. "There are many areas of the U.S. that are still favoring corn profitability."

According to the report, released on March 31, corn growers intend to plant 85 million acres of corn, down 1 percent from last year. If realized, this would be the second consecutive year-over-year decrease since 2007 but will still be the third largest acreage since 1949, behind 2007 and 2008. Ohio is among 10 corn-producing states, however, that collectively intend to plant 66.3 million acres, up slightly from the 66.1 million acres planted last year.

Soybean producers intend to plant 76 million acres. If realized the acreage would be the largest on record. Ohio is one state where acreage is expected to increase by100,000 acres or more.

All wheat planted is estimated at 58.6 million acres, down 7 percent from last year. The 2009 winter wheat planted area, at 42.9 million acres, is 7 percent below last year but up 2 percent from the previous estimate.

Roberts said that based on current estimates, the United States will see a reduction of 7 million acres for the principal crops. And the jury is still out as to what farmers are doing with that acreage.

"The big question is, where is all of that acreage going?" said Roberts. "Cotton production is reported to be down. Maybe those high input costs are driving some acres back to pasture, which is not a bad thing. This report doesn't give us the details we need to be able to figure that out at this time."

The USDA acreage report will be released June 30. At that time, said Roberts, analysts should have a better handle on the outlook of acreage planted.

For a copy of the USDA Prospective Plantings Report, log on to http://www.nass.usda.gov/Publications/index.asp.

Author(s): 
Candace Pollock
Source(s): 
Matt Roberts