Corn is king again as soybean acres fall in 2019
U.S. farmers are expected to plant nearly 4 million more acres of corn this year, according to the USDA's Prospective Plantings report released last week.
The report reveals farmers' intentions for planted acreage for principal crops in 2019. Based on a volunteer survey, the report provides a window into how farmers are likely to allocate corn and soybean acreage following retaliatory tariffs placed on U.S. agriculture beginning in 2018.
Survey findings show that farmers across the U.S. plan to plant 92.8 million acres of corn and 84.6 million acres of soybeans in 2019.
Corn Acres in 2019
For the 2019-20 marketing year, U.S. producers intend to plant 92.8 million acres of corn, up 4 percent, or 3.66 million acres, from the prior year. Corn acreage is expected to be the highest in Iowa at 13.6 million acres, followed by Illinois at 11.2 million acres and Nebraska at 9.7 million acres.
Wisconsin farmers surveyed told the USDA they expected to plant over 4 million acres of corn, up about 150,000 acres planted in 2018.
Compared with last year, planted corn acreage is expected to be in line with or higher than prior-year levels in 34 of 48 corn-producing states. The largest change in planted acreage was in the Dakotas, where growers intend to plant 1.6 million additional corn acres in 2019.
Soybean Acres in 2019
USDA estimates that U.S. farmers intend to plant 84.6 million acres of soybeans, down 5 percent, or 4.6 million acres, from the previous year. The reduction in soybean acreage was expected as old-crop soybean demand has been adversely impacted by retaliatory tariffs from China—reducing the export volume and ultimately the prices for soybeans. With lower expected returns on new-crop soybeans, farmers in 26 out of 29 soybean-producing states are expected to reduce plantings in 2019.
Soybean acres are expected to be the highest in Illinois at 10.5 million acres, followed by Iowa at 9.4 million acres. The decline in soybean acres is expected to be the greatest in Iowa, where producers will plant 600,000 fewer acres in 2019. Following Iowa are Minnesota with 500,000 fewer soybean acres and the Dakotas with 850,000 fewer acres.
Wisconsin growers also expect to plant fewer soybean acres. The survey shows that farmers intend to plant 2.15 million acres, 50,000 fewer acres than the previous year.
In 14 out of 29 soybean-producing states soybean acres will top corn acres in 2019. The states with the largest soybean-to-corn acreage ratio, include Arkansas, Mississippi, Oklahoma and Louisiana. Growers in all those states will plant at least twice as many soybean acres as corn acres.
Wisconsin growers also expect to plant fewer other grain crops. Winter wheat acres in the state for this coming growing season are estimated at 215,000 acres, 25,000 less than last year. Acres planted in oats will also be fewer, with farmers planning to seed 220,000 acres this spring, about 20,000 acres less than the previous year.
Given the trade headwinds soybean producers have experienced, analysts were anticipating a decline in U.S. soybean acres in 2019. Industry expectations were for 84 million to 88 million acres planted in 2019, and current projections are on the low-end of that range.
USDA’s Prospective Plantings report provides the first survey-based estimate of acreage for the upcoming crop year, but a variety of factors could change what growers plant this year. For example, the devastating floods experienced in the Midwest, along with the high flooding risk forecasted for this spring, may delay corn plantings and ultimately lead more growers to plant soybeans due to the later planting date.
Second, the administration has worked to restore normal trading flows between the U.S. and China for agricultural commodities. Purchases of corn, soybeans and pork, for example, have been announced in recent weeks. Restoration of the Chinese market could shore up expectations for soybean demand in 2019 and lead to slightly more soybean acres in 2019.
Given these uncertainties, markets will now turn their attention to the pace of old-crop demand and U.S. trade negotiations, specifically the U.S.-Mexico-Canada Agreement, U.S.-China and potential bilaterals with both Japan and the European Union. The next opportunity to evaluate actual acreage decisions will be USDA’s June 28 Acreage report.
John Newton is the chief economist for the AFBF. Colleen Kottke of the Wisconsin State Farmer contributed to this report.