Market Matters Blog
Katie Micik DTN Markets Editor

Wednesday 02/12/14

Let the Acreage Debate Begin

Now that February's supply and demand report is over even more of the market's attention will switch to the acreage "debate." While pundits, pencil pushers and bean counters will watch every little indicator leading up to planting season, most farmers already know what seeds are going in the ground this year.

A few different surveys are in, including a recent DTN 360 poll that shows farmers intend to plant more acres to soybeans this year. This year's debate likely won't be about how many acres of one crop or the other get planted. Rather, it will focus on the total number of acres that get planted. After last year's large number of prevent plant acres in main growing areas, it's quite possible farmers could plant another 97 million acre corn crop while also increasing their soybean acreage.

The latest results from the DTN poll reflect that trend. We asked farmers what their planting plans were and we found:

47% Plan to leave acreage the same as last year
4% Plan to plant up to 10% more corn acres
3% Plan to plant 10-15% more corn acres
3% Plan to plant more than 15% additional corn acres
12% Plan to plant up to 10% more soybean acres
7% Plan to plant 10-15% more soybean acres
11% Plan to plant more than 15% additional soybean acres
13% Intend to plant more of other crops like wheat, cotton, sorghum, etc.

(The poll was conducted January 23 to February 3 and had 483 responses.)

If 47% leave acreage the same as last year, we're looking at another big corn crop. We're also looking at an increase in soybean production.

What I find interesting is the breakdown by state. Illinois and Ohio farmers plan to keep their acreage mixes the same as last year, with 62% and 61% of responses falling in that category. The next closest response is that farmers in those states intend to plant 10% more soybeans.

In Iowa and Indiana, again, the largest response was leaving the acreage mixed untouched, but it was much lower than in Illinois -- 52%. Farmers here seem more willing to move away from corn. In Iowa, 13% said they'll plant up to 10% more soybean acres; 8% said they'll plant 10-15% more; and 11% said they'll plant 15% more. Indian's breakdown is similar: 21% will plant up to 10% more, 5% will increase acreage 10-15%, and 12% will increase by more than 15%.

A recent survey from the Iowa-Nebraska Equipment Dealers Association backs this up, arguing that farmers in Iowa will plant 10.3 million acres to soybeans in 2014, 11% more than last year. Iowa's shift is stronger than the nationwide 7% swing, according to this article in the Des Moines Register (…).

Another figure that jumps out at me is the 13% that plan on growing something other than corn or soybeans this year. Most of the Delta states reflect this shift, but there are also fewer farmers that responded from those areas. The results were fairly strong in Texas at 50%, Kansas at 25%, North Dakota at 28% and South Dakota at 17%.

"I know this is no big surprise, but the acreage shift in the "nontraditional" corn states to crops other than corn and beans may be leading the shift away from larger acres," DTN analyst Rick Kment said. "It was said in the past few years that these areas made up the majority of increased acres. This may pull overall acres down when these producers go back to crops more traditional in these areas.

"When combining all the increased corn acres (10%) with increased soybean acres (30%), there is a trend." Now the question is whether or not those trends will carry through the spring planting season.

Posted at 1:25PM CST 02/12/14 by Katie Micik
Comments (1)
In Ontario I had expected a drop in corn acreage for 2014 down from 2.15 million acres last year. However, with the drop in the Canadian dollar I no longer expect that. Corn's productivity gains on an annual basis are much higher than soybeans. 2 million acres is a flashpoint for Ontario grains, because with good weather, those acres and good provincial yields means we export to the US. That's like exporting snow to Canada at firesale prices. So I was looking for a cut in acres, but no more, more like the status quo. For Michigan farmers, it'll mean some of the lowest basis values in N America. For Ontario farmers, some of the cheapest corn in N America.
Posted by Philip Shaw at 9:41AM CST 02/19/14
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