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."
Overall, Utterback believes we will be hard-pressed to reach the same corn acreage numbers as 2012. "The only way you’ll see it is if we have exceptionally good planting conditions in the spring or if the bean market gets hammered."
According to a recent Farm Journal Pulse, most farmers are intending to plant the same amount of corn in 2013. More than 1,500 farmers responded to the question: What are your planting intentions for corn for 2013 vs. 2012?
Here are the results:
- 1-10% more: 12%
- 11-20% more: 10%
- Same: 54%
- 1-10% less: 9%
- 11-20% less: 9%
- Other: 6%
Read more about the corn market: 5 Corn Market Wild Cards
Uphill Battle for Soybean Acres
Ted Seifried, Zaner Ag Hedge Group vice president, says the huge soybean crop growing in South America will affect U.S. acreage. "With current profit structures, soybeans need to offer more incentive to buy acreage for the coming growing season."
He says that soybeans have become more attractive, since prices have showed sharp gains in the last few weeks. "If the market gets what it needs, which it almost always does, we should see soybeans continue to gain on corn in order to ‘buy acreage.’ This could come in the form of a soybean rally while corn and wheat stay flat."
Yet, he believes corn will win the battle in most areas. "I see a substantial incentive to plant corn next year due to the positive profit margin differential and the prospective of tougher global export competition for soybeans not far down the road."
Read more about the soybean market: Soybeans Trend Bearish, But Marketing Opportunities Remain
No Big Incentive for Wheat
Seifried predicts wheat will be the "odd man out" in the U.S., due to the relatively high global stocks of wheat on top of slowing demand. "It is simply a matter of fact that wheat is a global product and competition for export is high. So, in this current market climate corn should be adding acres over soybeans and mostly at the expense of wheat."
He says wheat is failing to join the bid against corn or soybeans or adding an incentive for additional acres.
Read more about the wheat market: Wheat Prices to Tag Along with Corn
Cotton Acres Take the Biggest Hit
With the large supply of cotton in the U.S. and around the world, Naomi Blohm, Stewart-Peterson senior market advisor, says there aren’t many reasons for the cotton market to get excited.
"We could lose 2 million acres of cotton to corn or soybeans." She says maybe in 2014, the excitement will come back into the cotton market and acres could increase.
Read more about the cotton market: Cotton's Wild Ride to Continue
What About You?
What will you plant in 2013? Submit your crop report to AgWeb Crop Comments.
For More Information
Editor's Note: As we prepare to put 2012 to bed, it is always a good idea to reflect on the past year. For the remaining days of 2012, the editors at AgWeb.com will bring you stories that were important this year and will continue to be top of mind in 2013.
2013 Marketing Outlooks
The editors at AgWeb.com are taking a look at experts’ projections for a variety of commodities in 2013 to help you succeed and be profitable in the coming year.
See current prices in AgWeb's Market Center.