Allendale: High Prices Attracting High Acres

This year could post the largest corn, soybean and wheat acreage since 2014. That’s according to Allendale’s annual, nationwide producer survey.

The increase in acres is two-fold, says Rich Nelson, chief strategist with Allendale. First, prevent plant acres from last year will return. Second, this year’s higher prices could encourage acres not currently in production.

For 2021, Allendale estimates:

Corn acres: 92.83 million acres, which is up 2 million from 2020

With a trend yield of 179.7 bu. per acre, Allendale’s corn production estimate of 15.24 billion bushels would be an increase over 2020 of 1.06 billion bushels. 

Soybean acres: 90.32 million acres, up 7.23 million from 2020

With a trend yield of 51.1 bu. per acre, Allendale’s 4.56 billion production estimate would be a record and 422 million bushels over 2020.

Wheat acres: 46.41 million acres, up 2.06 million from 2020

With a trend yield of 49.4 bu. per acre, Allendale’s production estimate for 2021 is 1.91 billion bushels. 

At the Agricultural Outlook Forum in late February, USDA shared these 2021 estimates:

• Corn: 92 million acres
• Soybeans: 90 million acres
• Wheat: 45 million acres

“Acres flow in and flow out of production based on profitability,” Nelson says. “This year we are probably drawing in acres not planted in previous years.”

In 2020, the U.S. had 10.2 million acres of prevent plant. The average is closer to 2 million, Nelson says. 

Overall, Nelson says Allendale doesn’t expect acres to be pulled from second-tier crops such as cotton and sorghum. That is what leads them to believe more acres will come back into production that were idle or potentially in hay.

“North Dakota is a wildcard,” he says. “We are calling for increases for corn and soybeans, as well as a slight increase in spring wheat.”

Allendale’s survey points to 2.3 million acres more of corn and 1.3 million more of soybeans in North Dakota.

Are Lower Prices Ahead?

With a likely increase in supplies, will the higher prices seen in the last few months sink? Not necessarily, Nelson says. 

“Production is only part of the equation,” he says. “We have lower beginning stocks. We also have strong demand. Overall, we still have a positive-looking balance sheet. It would generally imply high prices compared to the last few years.”

The Allendale survey also includes producer-reported crop sales. Farmers have sold around 79% of their old-crop corn. From 2018 to 2020 that number was around 60% to 65%.

For soybeans, farmers have sold 87% of their old-crop production. In 2018, that number was 85% but the last two years were closer to 70%.

“A lot of old crop has been moved, more than normal by this time,” Nelson says. “On soybeans, we might continue to see strong basis prices in the next few weeks.” 

For new-crop sales, farmers have sold around 16% of their corn and 15% of their soybeans. These numbers are average or slightly above average.