WASHINGTON, March 30, 2016 - After years of price declines and bin-busting production, producers are gearing up for another spring planting season despite – in some cases – Mother Nature’s best efforts.
It’s no secret that commodity prices have been on the decline for several years. Record production in the last couple of years has pushed global supplies to very high levels and sent prices on a downward spiral, leaving farmers in a quandary: produce less and reduce supply or produce more to compensate for lower prices?
In February, USDA projected a drop of about 2.5 million planted acres for the eight major U.S. crops. Wheat was forecast to take the biggest tumble – a drop of about 3.6 million acres – and corn the biggest increase, up 2 million acres. Some recent weather events – a spring snowstorm in Nebraska and the Dakotas as well as a wildfire in Kansas and Oklahoma – may play a role in planting decisions, but American Farm Bureau Federation Chief Economist Bob Young told Agri-Pulse that it’s just too early to tell.
“The question then becomes, do farmers change their minds? Do they shift their planting intentions? Do they move to something else?
“The weather’s going to do what the weather’s going to do, and farmers are going to react to that,” Young said.
At noon tomorrow, USDA’s National Agricultural Statistics Service will release the Grain Stocks and Prospective Plantings reports, which will give analysts a better idea of where the market is heading. Grain stocks are high across virtually all commodities, but it remains to be seen what the 2016 growing season will do to those stocks and – in turn – to grain markets.
In a poll conducted by Reuters, analysts are predicting USDA will estimate corn plantings at 90 million acres – a 2.3 percent bump from last year’s actual figure and consistent with estimates released at the department’s Ag Outlook Forum. The Reuters poll pegged soybean acres at 83.1 million, which would be a jump over previous USDA projections (an estimated 82.5 million) and last year’s actual planted acres (82.7 million).
Young told Agri-Pulse that he wasn’t expecting any “big moves” in the report, but thought the corn and beans estimates might be lowered slightly. However, he pointed out that when USDA projected the 2.5 million-acre drop, “folks were kind of wondering where those acres went, and I don’t think (USDA) had a good answer to that question.”
He added that this might be a time to move “edge or fringe” land back into hay, pasture, or perhaps the Conservation Reserve Program.
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