2017 Plant Preview: Great Plains Acre Shuffle?

March 27, 2017 09:48 AM
Planter collage

Only minor acreage shifts are expected in the Great Plains states of Nebraska, Kansas, Oklahoma, Colorado and Missouri. After several years of tight margins in crop production, farmers will focus on which crops yield the best on their farm and show the strongest profit potential.

“I doubt we’ll see as big of shift as most people say,” says Michael Swanson, Wells Fargo chief agricultural economist. “It’s easy to set in Chicago and talk about us growing 6 million more acres of beans. But, most people don’t want to break rotation and do beans on beans, with all the pest problems that come with it. We know how to do corn on corn. But very few people can do a soybean-on-soybean rotation.”

Additionally, most crop selections are locked in months before the planters roll, says Alan Brugler, president of Omaha-based Brugler Marketing & Management.

“Eighty percent of acres are locked in in December routinely,” he says. “The market is negotiating for that 20% swing. But rarely do we get more than a 2% to 3% swing. Weather is bigger factor.”

For farmers in the Great Plains, weather is a concern. While many have been able to do fieldwork much earlier than normal due to unseasonably warm temperatures in February and March, dry conditions prevail.

According to the March 14, 2017 U.S. Drought Monitor, large portions of Missouri, Oklahoma, Kansas and Colorado are experiencing moderate to severe drought conditions.

Drought monitor March 14, 2017

Source: http://droughtmonitor.unl.edu/data/pdfs/20170314/20170314_usdm.pdf

Here’s a high-level look at the states in the region.

Kansas: In the Sunflower State, Brugler expects more acres to be planted to corn and soybeans, because of low prices for wheat. Some areas are seeing decent moisture, but that’s always a limiting factor for Kansas farmers, he says. In 2016, Kansas farmers planted 8.5 million acres of wheat, 4.8 million acres of corn, 4.15 million acres of soybeans and 3.15 million acres of sorghum.

Nebraska: In 2016, Nebraska farmers planted 9.7 million acres of corn, 5.3 million acres of soybeans and 1.28 million acres of wheat. Most Nebraska farmers stick to their traditional rotations, Brugler says. But because of profit potential, he says some Nebraska producers are being pushed to plant more soybeans than corn. “Beans pencil better,” he says.

Missouri: In 2016, Missouri farmers added around 1 million soybean acres compared to 2015, totaling 5.5 million acres. Brugler expects the same or even slightly higher for soybean acres in the Show-Me State for 2017. Yet he also expects to see an uptick in corn acres, as well. In 2016, Missouri farmers planted 3.7 million acres of corn.

Colorado: Crop mixes in Colorado are traditionally consistent. “I’m not hearing a whole lot out of Colorado, so I don’t expect a dramatic shift—just more of the same,” Brugler says. Wheat and corn are the top two crops in terms of acres. In 2016 Colorado farmers planted 2.26 acres of wheat and 1.25 million acres of corn.

Oklahoma: Wheat is the No. 1 crop in Oklahoma and last year farmers in the Sooner State planted 5 million acres. However, the production costs for wheat are currently greater than potential price, says Kim Anderson, agricultural economist with Oklahoma State University Extension. As a result, he’s expecting lower wheat acres. The wildfires that have been tearing across the state will also have an impact on wheat production.

As for the other crops, Anderson says sorghum acres may increase slightly more than 2016 levels, but producers are still gun shy about the sugar aphid. He also expects corn to earn some acres because of its higher potential to generate a profit compared to wheat.

Yet for acres in flux, soybeans may win out. “Seed dealers report significantly higher soybean seed sales and current prices show highest profit potential of all,” Anderson says. Last year Oklahoma farmers planted 450,000 acres of soybeans.

Canola acres should be on target with recent years. “it is a good rotation crop and offers higher potential for profit than wheat,” Anderson says.


2017 Spring Planting Preview: Great Plains

States: Missouri, Nebraska, Kansas, Oklahoma and Colorado

Top Contender: Corn and soybeans

Sleeper: Wheat

Factors to Watch: Moisture levels at planting time; wildfire aftermath; corn-to-soybean ratio for profit potential. 

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