An additional 9.8 million acres will be planted to crops in 2011, the largest year-over-year increase in planted acreage to the eight major crops in the U.S. since 1996, according to USDA Chief Economist Joe Glauber.
Here are the acreage levels that Glauber said USDA currently expects:
- Corn: 92.0 million, up 3.8 million acres
- Soybeans: 78.0 million, up 0.6 million acres
- Wheat: 57.0 million acres, up 3.4 million acres
- Cotton: 12.8 million acres, up 2.9 million acres
The level of area planted to the eight major crops at 255 million acres will be the highest total for these crops since 1998, Glauber said. "It will be a real challenge to get to the 10 million acres needed," Glauber said.
"Despite increased production of corn and soybeans, grain and oilseed markets are still forecast to be tight due to strong export demand and strong demand for biofuels," Glauber said. "Unless this year’s weather is better than normal or plantings increase more than expected, stock levels for corn and soybeans should see only modest rebuilding in 2011/12. This will likely mean continued volatility in those markets."
Despite an anticipated 4 percent increase in planted acreage, the corn market will continue to be tight in 2011/12. Assuming harvested acreage of 84.9 million acres and a trend yield of 161.7 bushels per acre, corn production for 2011/12 is forecast at a record 13.73 billion bushels. Because of this year’s smaller carryout, total supply for 2011/12 is estimated at 14.425 billion bushels, an increase of only 250 million bushels over 2010/11 levels.
Total corn use is projected at 13.56 billion bushels. Higher exports and higher corn use for ethanol will more than offset an anticipated reduction in feed use. Feed and residual use is anticipated to fall slightly in 2011/12 as high feed costs limit expansion in the pork and poultry sectors and beef feeding declines with tighter feeder cattle supplies. Exports, however, are anticipated to increase to 2 billion bushels as reduced global use of feed quality wheat boosts world corn trade and consumption.
With total supply at 14.425 billion bushels and total use at 13.56 billion bushels, ending stocks are projected at 865 million bushels in 2011/12, a modest 190-million bushel increase over the level projected for 2010/11 levels. Stocks-to-use levels will remain tight at 6.4 percent. Corn prices are forecast at a record $5.60 per bushel, $0.20 higher than the mid-point of the range forecast for 2010/11.
Higher than trend yields or larger planted area could help rebuild corn stocks, but stock levels are not likely to return to recent levels over the course of one or even two seasons. For example, if 2011/12 yields were to equal the record level of 164.7 bushels per acre achieved in 2009/10, ending stocks would exceed 1.1 billion bushels. And this assumes no increase in use for feeding, ethanol, or exports, an unlikely scenario. Further, assuming this yield and no increase in usage, 2011 planted area would have to increase 8 million acres to return stocks to the 2010/11 level of 1.7 billion bushels.