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Prospective-planting acres surprise forecasters

Prospective-planting acres surprise forecasters

The U.S. Department of Agriculture’s annual Prospective Plantings report, released March 31, is the first look at the 2021 planting intentions farmers have for principal crops. The survey-based report estimates that as of March 1, U.S. farmers intend to plant 91.1 million acres of corn and 87.6 million acres of soybeans in 2021. Combined, corn and soybean acres would be an estimated 178.7 million acres. That’s the second-most acreage on record, behind only 2017 when more than 180 million acres were planted.

But with tightening supplies rapidly increasing commodity prices during the past month, it’s difficult to believe farmers would not consider this incentive to plant more acres of both corn and soybeans – and surpass the 2017 record.

At the 2021 Agricultural Outlook Forum in February, the USDA estimated farmers would plant 92 million acres of corn and 90 million acres of soybeans. Leading up to this report, analyst estimates were much more, especially with increasing commodity prices. Estimates for corn were at about 93.2 million acres, while soybean forecasts were closer to 89.9 million acres.

According to the USDA’s Prospective Plantings survey, farmers intend to plant 91.1 million acres of corn. When compared to the USDA’s February estimates, corn-planted acres decreased by 900,000 acres. The Prospective Plantings report also indicates farmers intend to plant 300,000 more corn acres than in 2020, less than a 1 percent year-over-year increase.

For 2021 soybeans, the USDA estimates farmers intend to plant 87.6 million acres, 4.6 million more acres of soybeans than in 2020 for an increase of 6 percent. But the survey-based report indicates there are about 100,000 fewer acres that will be planted to soybeans than what was first estimated in February. Combined, the USDA’s Prospective Plantings survey indicates farmers may plant 4.5 million acres fewer of corn and soybeans compared to earlier estimates, potentially leading to a further tightening of supply.

The USDA’s estimate of 91.1 million acres of corn for the 2021-2022 marketing year is close to the 90.8 million acres of corn planted in 2020 and the 89.7 million acres planted in 2019. Corn acreage is expected to be the most in Iowa at 13.2 million acres, a decrease of 3 percent from 2020 when 13.6 million acres were planted. Keep in mind at this time in 2020, estimates for Iowa indicated 14.1 million acres were to be planted and actual numbers came in 3 percent less.

The second-largest state for intended corn acres is Illinois at 10.9 million acres, a decrease of 4 percent from 2020.

That’s followed by Nebraska with 9.9 million acres, a decrease of 3 percent from 2020.

North Dakota is estimated to have the largest year-over-year change in planted corn acres with an estimated 3.3 million acres planted, a decrease of 69 percent from 2020 when 1.95 million acres were planted.

Mississippi is the second-largest year-over-year increase of intended planted corn acres with 640,000 acres of corn, an increase of 25 percent compared to 2020 when 510,000 acres were planted.

The third-largest increase is expected in Louisiana with 610,000 acres of corn planted, an increase of 22 percent from 2020 when 500,000 acres were planted.

Figure 1 shows each state’s intended corn planted acreage and Figure 2 displays the year-over-year change in corn acres to be planted.

The intended soybean-planted acres for the 2021-2022 marketing year fell flat compared to pre-report expectations. The USDA estimates 87.6 million acres of soybeans for 2021, which would be a 6 percent increase from 2020. But it would only be the third-largest number of acres behind 2017 and 2018.

Illinois is poised to plant the largest amount of soybean acres with 10.7 million intended in 2021, an increase of 4 percent from 10.3 million in 2020.

Second is Iowa with 9.8 million acres, an increase of 4 percent from 9.4 million acres in 2020.

Minnesota is expected to be third with 7.8 million acres of soybeans, an increase of 5 percent from 2020 when 7.4 million acres were planted.

South Carolina is expected to have the largest increase of soybean-planted acres, increasing 26 percent from 310,000 acres in 2020 to 390,000 acres.

The second-largest increase is anticipated in North Dakota, with an increase of 22 percent from 5.75 million acres in 2020 to 7 million acres in 2021.

The third largest-increase of soybean-planted area is estimated in South Dakota with an increase of 15 percent from 4.95 million acres in 2020 to 5.7 million acres in 2021.

Figure 3 shows each state’s intended soybean-planted acreage and Figure 4 displays the year-over-year change in soybean acres to be planted.

When combined, Iowa, Illinois and Minnesota lead the country in corn and soybean acres; Minnesota is the only state with an increase in acres from 2020 to 2021. Iowa has no change in combined corn and soybean acres but shifts 400,000 acres from corn to soybeans in 2021. Illinois also has no change in combined corn and soybean acres but shifts 400,000 acres from corn-planted acres to soybean-planted acres.

Minnesota adds 400,000 acres to intended soybean-planted acres and no increase in corn acres. Nebraska shifts 300,000 acres from corn to soybeans with no change in combined acres.

Figure 5 shows each state’s corn and soybean combined planted acreage and Figure 6 displays the year-over-year change in combined corn and soybean acres to be planted.

Summary

The Prospective Plantings report contains the first survey-based estimates the USDA issues of crop production for the upcoming marketing year. Market analysts were preparing to be shocked and expected large market reactions. But despite tightened supplies and increasing commodity prices for both corn and soybeans, 14 states are expected to have a 1 percent or less change in combined corn- and soybean-planted acres from 2020 to 2021. That means that outside of an increase in planted acres, to truly meet the increased demand for corn and soybeans on the horizon there will need to be record-breaking yields or supply rationing. Good news for farmers, tightened supplies and increased demand will help hold commodity prices at current levels and could potentially increase them.

Market reactions to the report’s release caused corn prices to increase 25 cents on the day to more than $5.60 per bushel and soybean prices to increase 70 cents to more than $14.30 per bushel. Markets increased the daily price limit on futures contracts – 40 cents on corn and $1.05 on soybeans. The next crop-acreage update for the 2021-2022 marketing year will be the USDA’s June 30 Acreage report.

Shelby Myers is an economist with the American Farm Bureau Federation’s Market Intel. Visit www.fb.org/market-intel for more information.

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