Market Matters Blog
Acreage Arguments
I didn't know I was going to stir the pot.
On Friday morning, I sent out this Tweet: "Farmers: how likely are you to increase your soybean acreage next year? Working on quick article and would love some perspective!"
Really, it was a very quick story. Just a quick review of Informa's 2015 acreage estimates. We're about a quarter through corn harvest and halfway through bean harvest, so it's a little early to be putting much stock in these estimates. (If you're wondering, Informa pegged corn acreage down 3.1 million acres at 87.8 ma and soybean acreage up 4.3 ma at 88.5 ma.)
What I learned from Twitter is that, while it's early, there are plenty of opinions on just how much farmer will -- or won't -- increase soybean acreage. Some have really strong opinions -- they divided pretty evenly into the stick-to-the-rotation camp and all-about-economics camp -- but others are still weighing their options, concerned about seed and fertilizer prices.
Cory Ritter, a farmer in Blue Mound, Ill., argued it'd be tough for some farmers to increase soybean acres next year if they already made large increases in 2014.
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Kyle Wendland, who farms in a heavy corn-on-corn area near Fredericksburg, Iowa, thinks there are plenty of reasons, mostly economic, for farmers to increase soybean production. Given the revenue incentives, there's lots of land that could be planted to beans for the first time in a while.
Here's a smattering of the other responses I received (edited to make them easier to read, aka I removed the hastags and filled in missing words):
"Corn acres plummet next year at current price levels, so the default option is soybeans, lots and lots of soybeans. Ontario corn acres will be down another 30% next year, ditto across the US. Corn belt prices don't lie unless (there's) a winter surprise. Seed corn prices need to drop 25%, fertilizer will be much lower. There is a way out, but now, it's plant beans." -- Philip Shaw, @agridome, Ontario, Canada
"Major increase in double crop for us." -- Jason Goetz, @piratepride2, northeast North Carolina
"Unless fertilizer drops 25% or corn price rises to $4.50+, more beans everywhere except I states and Irrigation, the other I state." -- Stephen Ellis, @sellis1994, Virginia.
"Stay the same. May even go to more corn acres depending on if Bayer is approved for SDS treatment." Richard Mellencamp, @rmellenc
"Moving long term corn acres (3+ years) out of that rotation and into beans. Everything will go corn, corn, beans. We've been 2/3 corn to 1/3 beans since before I was born, '07 we went to 75-25. Going back to the 2/3 ratio." Bryan Boock, @BryanBoock, Bald Bluff, Ill.
"May go more corn, better local markets, better upside potential. I'm a little contrarian too." Adam Ramthun, @Adam_Ramthun, Manson, Iowa.
"In North Dakota most producers will increase acres by 25% or more." -- Kurt Weninger, @Weninger75,
So, what do you think? How likely are you to increase soybean acreage next year? What's the key consideration in your thought process?
(AG/CZ)
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