USDA’s annual Ag Outlook Forum will take place Thursday and Friday. During the event, USDA’s new chief economist Seth Meyer will give a glimpse at the supply and demand picture, as well as set up the acreage discussion. While the first glimpse of acreage mix possibilities in 2021 will happen during the event, it’s not based on farmer surveys.
In preparation for the meeting, University of Missouri economist Ben Brown says this year’s debate could be dynamic, as tighter supplies will encourage planting.
“USDA put out their first charts in November this year, which was new, and they had their acreage estimates in there, but a lot of things have changed since then,” says Brown. “It would be interesting to see what they’re now expecting us producers to do this year for both corn and soybean acres. It’s been a while since we’ve needed both crops to increase acres. And the fight is on to see which one picks up more acres than the other.”
Brown says when discussing just corn versus soybeans, the economics today point to the possibility of more soybean acres. However, he understands there’s still a lot that can change between now and planting season.
“I’m still giving the tilt to soybeans,” says Brown. “I think soybeans still continue to provide that economic incentive to increase soybean acres. However, so much of this is driven by planting conditions in the spring. If it’s dry, corn is profitable, farmers get in the field and start rolling, we’re going to see increases in corn acres just on the ability to continue to plant and farmers love to plant corn.”
Brown says while the economic incentive today favors soybeans, corn still has a draw. And as corn prices climb, one analyst thinks corn could win over acres this year.
“I think it’s shaping up to be a really interesting spring timeframe,” says Chip Nellinger of Blue Reef Agri-Marketing. “I’ve been a little bit surprised in the fact that we’ve seen a couple private estimates already out, as well as farmer- type surveys, and the corn number ended up being a lot higher than what I would have really thought. This is going to shape up to be a really interesting spring.”
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