USDA’s June Acreage report tends to be a major market mover.
Ahead of the June 28 report, we asked ag economists to weigh in on where they think the acreage numbers could land. The majority of economists think we could see more soybean acres than what was revealed in the March Prospective Plantings Report, but they don’t expect the corn acreage estimate to grow much.
In the latest Ag Economists’ Monthly Monitor, a survey of nearly 70 ag economists from across the country:
- 60% of economists think corn acreage will fall in the 90 to 91 million acres range.
- That compares to the 91 million acres USDA found when they surveyed growers about planting intentions back in March.
- 20% think it’ll be even lower, in the 89 to 90 million acres range.
- 20% also think it could come in higher, at 91 to 92 million acres.
- Soybean acreage was slightly higher, with 60% of ag economists saying 87 to 88 million acres.
- That compares to the 86.5 million in March.
The No. 1 Thing Farmers Can Do Now
As the market awaits the big report, what are some potential fireworks that could come out of the report? Scott Brown, University of Missouri ag economist who helps author the monthly report, says the big fireworks could come if USDA shifts both corn and soybean acres.
“I think if we get a growth in both corn and soybean planted acres, it will be a negative for markets, at least they’ll respond negatively in the short-run,” Brown says. “I would encourage folks to think about whether there’s any risk management they might want to do before the report comes out. It’s hard to tell, at this point, which side of that. Some ag economists are saying we will see less acres for both corn and soybeans. If that happens, we could get a surprise on the other side as well. I keep saying I think we’ve planted more acres, but we’ll see what happens on the yield side. All of this could continue to put pressure on prices to move lower as we get closer to fall harvest.”
What If Corn Acres Grow?
If corn acres come in around the 91 million acre mark, Krista Swanson, lead economist for National Corn Growers Association (NCGA), thinks the U.S. balance sheets can handle the shift to slightly more corn acres.
Economists think we’ll gain back little bit of maybe what we lost in terms of principal crop acreage from the prospective plantings report back in March, when we see the June acreage report at least, that’s what the economist that reported this month say.
“It really depends on where yield comes in, and that’s a big question at this point in the growing season,” says Swanson. “Tight now USDA is projecting a 181 bu. per acre yield, and just as a reminder, last year, the 177.3 bushel per acre yield that we had was a record yield. So we’re talking about a yield that’s four bushels per acre above that. So, I think that there’s some question as to if we can actually achieve that level.”
She says if the yield comes in under 181 bu. per acre, and acreage stays around 91 million acres, it could cut the U.S. carryout.
“If we had a yield at 178 [bu. per acre], which would still be a record just edging out over where we were last year, there is a way to end up with carry out below 2 billion bushels. So, it’s the combination of acres, and also where yield comes in this year,” says Swanson.
She says some areas of the U.S. are off to a great start with this year’s corn crop, especially in areas seeing drought relief. However, other areas of the U.S., including Texas and Minnesota, are now seeing too much rain.
“I definitely think that there’s some areas of the country where maybe we’ll have some of those yield impacts due to weather,” she adds.
However, Swanson points out if USDA shows 1 million more acres of corn and 1 million more acres of soybeans, that will put pressure on commodity prices.
The Principal Crops Wildcard in USDA’s June Acreage Report
Another wildcard is what happens with the principal crops number. In March, one of the big surprises was the drop in overall acres this year. USDA’s report showed principal crop acres fell 6.3 million acres year over year. The biggest decline in overall acreage came in Texas, New Mexico, Oklahoma, Kansas and South Carolina.
The Ag Economists’ Monthly Monitor asked economists to weigh in on where they think those 6 million acres could go. More than half said it could go to more corn acres. Some economists think those 6 million acres could also shift to soybeans, cotton or wheat, but a few economists also think USDA could show more hay acres.
Swanson also thinks some of those acres this year shifted to CRP or other climate programs, including solar.
“There was the open enrollment in CRP. I know, just speaking on our farm, in particular, we have we have quite a few acres that we farmed last year that are in CRP for this year. And so you know, that’s one potential place that some of those acres,” she says. “I think that we’ll still be under acres with total principal crops compared to last year, but we’ve also seen expansion of things like solar and that that’s taking up some farmland.”
Swanson says she does expects to not see 6 million acres of lost principal crop acreage in the June report, expecting that number to come down, possibly moving to more corn and soybean acres.
Members of industry agree there are incentives for farmers to plant any potential acre.
Jeff Tarsi, president of global retail at Nutrien, said during the company’s early June investor day that Prevented Planting coverage is not as strong as it has been in the past, and while it may be a tight time window, farmers will want to finish any corn acres they can and also plant soybeans.
“There’s a big difference this year versus in the past–a grower is really not incentivized to take prevent plant this year. And so some those areas where we have seen some crop shifts, what I’m very confident of is we’ll see a crop planted on that acreage in 2024,” he says.
