USDA corn estimates suggest growers exploiting ‘early' spring
By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, April 4, 2012 -Farmers are using an early spring in much of the Heartland to begin what's expected to be their biggest corn planting campaign in 75 years. And they hope the earlier-than-usual start will translate to a record U.S. yield this fall.
About 3% of the U.S. corn crop has been planted, according to the first crop progress report of the season issueed Monday by USDA's National Agricultural Statistics Service (NASS). In the previous five years, 2% of the crop was in the ground on April 1.
NASS said that corn planters were rolling last week as far north as Illinois, where 5% of the crop was seeded. Confirmation of the quick start came three days after USDA said farmers intend to plant 95.9 million corn acres this year, up 4% from 2011 and the most since 1937 when 97.2 million acres were planted.
“The prospective planting number . . . for corn really blew pre-report expectations out of the roof,” said John Anderson, an economist for the American Farm Bureau Federation. A trend yield of 164 bushels per acre could result in a record-shattering harvest of 14.4 billion bushels.
“That should mean lower feed prices for livestock producers. And it would take some of the pressure off the ethanol sector, which is already close to hitting both its mandated level of production and the maximum gasoline blend rate,” said Anderson, who was quick to point out that near-perfect growing weather will required. And that's a big “if,” based on the number of curveballs Mother Nature has thrown at farmers in recent years.
The bulk of the planned 3.9-million-acre increase in corn is coming in North Dakota (1.17), Minnesota (600K), Iowa (500K), Nebraska (450K), and Ohio (400K).
“We don't raise 200 bushel (per acre) corn in North Dakota ‑ it's more in that 100-150 bushel range ‑ but acreage in Iowa was up big and that's where they do grow it,” said Greg Paulson, an analyst with Northern Crops Marketing and Investments in Langdon, N.D., on a post-report conference call hosted by the Minneapolis Grain Exchange.
“So I don't think you have to deviate too much from the trend line yield, especially if we get this crop in early and weather stays decent.” The shift to corn in the Dakotas came to some extent at the expense of spring wheat, with acreage in the two states expected to fall by 300,000.
“The North Dakota farmer is getting a little tired of the abuse that they've taken from buyers of spring wheat,” contended Paulson. “At least when you grow corn, beans or canola, you know what you have and you're not as subject to the discount game as spring wheat is.”
The likelihood that more corn will be planted in areas of the country not known for producing bin-busting yields is a major reason why one ag research firm believes 2012 yields will fall short of current USDA projections.
“We are much more bearish in terms of yield than USDA is,” said Sterling Liddell, global strategist with the Rabobank Food and Agribusiness Research and Advisory team and co-author of the report “Can Corn Keep Up?” “Looking at where we would expect yield to be, we put it at around 156 bushels” an acre, he said.
In an interview with Agri-Pulse, Liddell said that structural changes in how and where corn is produced in the United States is decelerating yield growth, making “the road to increasing stocks through yield more challenging in our view.” The report notes only a 50% probability that U.S. corn production will keep up with worldwide demand.
As unexpectedly high as the prospective plantings report corn number was, the soybean figure was far lower than analysts had expected, coming in at 73.9 million acres, down 1.7 million from last year.
A rally of nearly $1 per bushel in November futures - to $13.95 ‑ since the middle of last week “might have bought some acres back,” Paulson said.
Original story printed in April 4th, 2012 Agri-Pulse Newsletter.For more news visit: www.Agri-Pulse.com