WASHINGTON, Dec. 18, 2014 - Farmers are expected to trim their plantings of corn, soybeans, cotton and wheat amid slumping market prices and a steep drop in expected profits, USDA said today in its latest long-term projections.

The cutback would come despite new farm subsidies designed to protect farmers against the falling prices.

The forecast indicates that corn and wheat growers would qualify every year for subsidies under the 2014 Farm Bill’s Price Loss Coverage program, if they sign up for it. Prices for those crops are projected to stay below the levels that trigger PLC through the rest of the decade.
Total plantings of the eight major field crops – corn, sorghum, barley, oats, wheat, rice, cotton and soybeans - are expected to fall from 258.5 million acres in 2014 to 254.7 million acres in 2015. USDA sees an even steeper drop in 2016 to 248.3 million.

Farmers are expected to plant 88 million acres of corn, down from 90.9 million this year and 95.4 million in 2013. Growers are expected to net $216 an acre - not counting land costs – on the 2015 corn crop, down from $244 an acre this year and $349 last year.

USDA estimates that the average farm-grate price for the 2015 crop will slip 10 cents to $3.40 per bushel. PLC payments are triggered when the average price is below $3.70.

Meanwhile, the price of wheat is expected to dip to $5 per bushel for 2015 – down from an estimated $5.90 for this year’s crop – well below the PLC trigger price of $5.50.

The impact on the federal treasury will vary. Lower commodity prices “also translate into lower crop insurance liabilities, premiums and premium subsidies,” said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri.The price projections are broadly consistent with previous USDA forecasts, he noted.

Soybean growers are expected to see an even steeper drop in net returns - $289 an acre on this year’s crop down to $207 in 2015. USDA projects the average farm-gate price of soybeans will fall to $8.50 per bushel for 2015, down from $10 this year but just above the PLC trigger price of $8.40 a bushel.

USDA projects that farmers will plant 84 million acres of soybeans next year, down from this year’s 84.2 million.

Cotton growers took a big hit in their pocketbooks in 2014 – net returns fell from $274 an acre in 2013 to an estimated $74 this year – and they are expected to slip to $71 in 2015.

The net return on wheat is estimated at $99 an acre in 2015, down from $126 in 2014.

Economists already are projecting big farm program payments on some of this year’s crops.

Corn growers are in line to receive $67 an acre under another new program, Agricultural Risk Coverage, or $22 an acre under PLC, based on USDA’s most recent price estimates, according to estimates issued today by economists at the University of Illinois and The Ohio State University. Farmers must choose between the two programs.

Peanut growers, meanwhile, are expected to receive PLC payments of $125 per acre, while rice growers would get an estimated $76 an acre under PLC.