North Carolina State University Extension specialist Nicholas Piggott told producers at the American Farm Bureau Federation’s (AFBF) 93rd Annual Meeting he anticipates "another fierce acreage-bidding war" this season, with corn the likely winner or more acres.
"This is fantastic for you farmers out there," Piggott argued, citing producer reaction to strong market signals. However, "acreage is not limited," and tight corn stocks and continued high prices should translate to a significant boost in nationwide corn acreage, likely at the expense of cotton, and possibly soybean, production. Piggott noted 2011 was a "great year" for corn, cotton, and wheat but only a "moderate year" for soybeans, and this season’s U.S. bean market outcome may depend largely on South American weather and its impact on foreign supply.
"Unless the corn price comes down, which I doubt it will with the tight corn stocks, we’re going to need soybean prices to rally significantly to beat those (soybean-to-corn) acres back," Piggott advised. "I think the balance sheets will look stronger for corn."
Continued ethanol profitability also weighs in favor of increased corn plantings, he said, especially if the biofuels industry can overcome current regulatory and logistical obstacles and opposition from the small equipment sector to new 15% ethanol/gasoline blends. Hearty retail "E15" adoption could mean a 50 percent boost in ethanol market growth, Piggott projected.
Given a significant increase in cotton ending stocks for 2011 and concurrently healthy crops out of Australia, Pakistan and India, corn or wheat likely will grab more southern cotton acres in 2012, said the economist.