Ahead of the March 31 USDA Prospective Plantings report, several other entities are making their own educated guesses regarding U.S. row crop acres. The latest to do so is MetLife Agricultural Finance, which expects farmers to up their soybean acres by 3.3% from 2016.
That would bring the U.S. soybean crop to 87 million acres, slightly lower than Allendale’s projection of 88.8 million acres and USDA’s 2017 Agricultural Outlook forum’s projection of 88 million acres. MetLife suggests year-end price ratios support both rising soybean and cotton acreage, according to its latest Ag Quarterly report.
“Cyclically low agricultural commodity prices have led to declining financial conditions in the sector, and planting soybeans requires less working capital compared to corn and cotton,” the report notes. “For example, the average per-acre operating costs in soybeans in 2015 were $171, compared to $334 for corn and $497 for cotton … our current estimates point to 87, 89 and 10.6 million acres planted in soybeans, corn and cotton, respectively.”
Other highlights of this quarterly report include:
- MetLife doesn’t expect farmland values to begin a recovery until 2019.
- Per-capita red meat supplies could rise another 2.6 pounds in 2017. Low feed prices could continue to motivate further increases in output.
- U.S. pork slaughter capacity is expected to increase 6% from 2016.
- The current administration’s approach to U.S. trade policy could have negative impacts on agribusiness in 2017 because renegotiating trade agreements can interrupt trade activity.
- Approach 2017 with caution, as this political uncertainty can fuel volatile markets, MetLife suggests.