Next year’s acreage mix will be a key indicator for which direction prices will go. Market experts provide insight.
U.S. farmers planted a record amount of corn acres in 2012, yet were far from record production due to the impact of the historic drought. As 2013 nears, chatter among the markets and in farm country is about the 2013 acreage mix.
Here’s how USDA estimated acres among the main crops in 2012:
- Corn: 96.9 million acres
- Soybeans: 77 million acres
- Wheat (all): 55.7 million acres
- Cotton (all): 12.4 million acres
So, what does 2013 hold? Will it be a repeat?
Jerry Gulke, president of Gulke Group and Top Producer columnist, thinks corn acres will be as big as or larger than what we did this year. "We talk about planting mixes, but in the Midwest, at least, we like to plant corn."
Because a lot of CRP acres have already been converted back to production acres, he says we may possibly have up to 1 million more acres of corn.
Dustin Johnson, a broker with EHedger, says his firm believes that both corn and soybeans will gain acres next year. "We see corn acres above 97 million and soybean acres at 79.5 million. Wheat acres could be down slightly at 56.9 million."
Johnson says new crop prices and subsoil moisture are the biggest factors affecting these numbers. "Input prices are skyrocketing and if the market doesn't hold we could see these numbers decline. The soybean-to-corn ratio still favors planting corn in many areas."
Bob Utterback, president of Utterback Marketing and Farm Journal economist, believes we’ll see more of a regional situation for acreage mix. "When you look at central Indiana, northern Illinois, Minnesota and N.D. and S.D., I think they will be wall-to-wall corn."
Yet, in areas that were hit hard by the drought, such as Illinois, Indiana and Ohio, along with the southern edge of the Corn Belt, Utterback believes farmers will shift more to soybeans, or a wheat-bean double-crop.
Some of this switching will be more for agronomic issues. "This is the second year in a row corn-after-corn acres have greatly underperformed compared to corn-after-beans acres."