The USDA shocked the agriculture world and defied analyst estimates, real world data, and basic common sense in their annual acreage report. Despite the worst planting season in over 20 years, the USDA expects 2013 corn acreage to be the highest since 1936. Corn supplies as of June 1, 2013, declined to 2.76 billion bushels, the lowest since 1997 due to the devastating drought last year.
US farmers are expected to plant 231.3 million acres of corn, soybeans, and wheat for the 2013 crop year, a roughly 1% increase from 2012's 229.8 million acres. High commodity prices and low supplies from last year’s drought are incentivizing farmers to plant as many acres as possible.
Corn planted acres for 2013 were estimated at 97.4 million acres, 200,000 acres higher than 2012 and 100,000 acres higher than last month’s WASDE estimate. The USDA corn acreage estimate was surprising as farmers across the Corn Belt have been unable to plant corn due to difficult wet weather during the planting season. Analysts’ expectations were for a two million acre reduction to roughly 95.0 million acres of corn.
Soybean planted acres were estimated at 77.7 million acres, the highest planted acreage on record and an increase of 1% from last year. Record breaking planted acreage is expected in New York, South Dakota, and Pennsylvania.
A large increase in soybean acres were noted in Indiana, Iowa, Missouri, Nebraska, and South Dakota, most likely due to farmers switching from corn to soybeans.
Wheat planted acres were estimated at 56.5 million acres, an increase of 1% from 2012's 56.0 million acres. 2013 winter wheat planted area is 42.7 million acres, a 3% increase from last year, and spring wheat acreage is estimated at 12.3 million acres, a slight increase from 2012.
For the acreage report, the USDA surveyed more than 70,000 farmers by telephone, mail, internet, and personal interviews during the first two weeks of June. The questions covered 11,000 one square-mile randomly selected areas across the US.
Corn stocks as of June 1, 2013 were estimated at 2.76 billion bushels, a 12% decrease from last year. The quarterly stocks estimate was roughly 80 million bushels less than analysts’ estimates due to higher than expected feed usage.
1.26 billion bushels of corn are stored on farms, down 15% from 2012. Off-farm stocks, at 1.50 billion bushels, are down 10% from last year. Disappearance from March 2013 to May 2013 was 2.64 billion bushels, compared to 2.88 billion bushels a year ago.
Soybean stocks as of June 1, 2013 were estimated at 435 million bushels, a decrease of 35% from 2012 and the lowest level since 2004. On-farm stocks were 171 million bushels, a 4% decrease from a year prior. 263 million bushels were located in off-farm locations, a 46% decrease from last June. Disappearance from March 2013 to May 2013 was 564 million bushels, a 20% decrease from last year.
As of June 1, 2012, all wheat stocks were estimated at 718 million bushels, a 3% decrease from a year prior. 120 million bushels were held in on-farm locations, up 7% from last June. Off-farm stocks were estimated at 598 million bushels, a 5% drop from a year ago. Disappearance from March 2013 to May 2013 was 516 million bushels, an increase of 13% from last year.
The USDA, known for their surprises and inconsistent data, didn’t disappoint today. Anyone who has spent a minute of time in the Corn Belt, would easily realize the USDA’s estimate of 97.4 million acres of corn is unrealistic. Based on our first hand experience of looking at farms from the Dakotas to Indiana, even 95.0 million acres of corn is a stretch.
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