The Farm Service Agency’s announcement of a record 19 million acres of prevented planting underscored how unique this growing season has been.
However, University of Illinois agricultural economist Scott Irwin said it’s all about how this year fits into the big picture.
“I think the key, because it is such an extraordinary and unusual year, is what is the total of corn and soybean planted acreage last year, and how does that compare to the totals this year?” Irwin said.
Corn acres are steady to up, while soybean acres are down, he said.
“What farmers did was say they’d like to keep corn planted acreage flat compared to last year, but they also (took prevent plant) on a huge amount of acreage,” Irwin said. “If the total size of the (acreage) is roughly fixed, that means the prevent plant acreage actually came out of soybeans.”
The market expected corn to see a significantly larger drop in acres, which combined with a projected yield increase, led to prices tumbling.
Delayed planting combined with prevent plant numbers has already forced some premiums in prices depending on where the issues have been, Iowa State agricultural economist Chad Hart said.
“South Dakota basically didn’t get planted. The Eastern Corn Belt, some didn’t get planted, but most was planted late,” Hart said. “You’ve already seen some basis strengthening in the majority of the Corn Belt, but especially in the eastern Corn Belt. (People have) the knowledge that production isn’t going to be there when we get to harvesting this fall.”
In its acreage and production report Aug. 12, the USDA increased corn yield estimates by 3.5 bushels per acre, which came as a surprise to many. Hart repeated that the production issues that delayed planting have people doubting that increase.
“What (the USDA) had to do was show us where the crop is right now,” Hart said. “They said we can’t factor in bad conditions. They had to assume the crop would progress normally.”
Hart said the potential for that corn crop — estimated at an average 169.5 bushels per acre — is still there, but weather will need to cooperate with a long fall.
Counting on a long fall for finishing the crop properly is difficult to do, especially considering quality of the crop will be taken into account for price increases and decreases, Irwin said. The longer farmers wait on harvesting, the risk for disaster increases.
“A frost any time in mid-October could be devastating to the corn and soybean crops,” Irwin said. “There’s a long way to go. Maybe it’ll be a warm, nice fall and we won’t have that problem, but we are really pushing the boundaries on frost and freeze dates on tens of millions of acres.”
If an early frost comes to pass, it could “evaporate” the 5 million planted acres the market wasn’t expecting on the original acreage report.
“I think the market should be pricing in more weather premium at this point for the frost risk, but it’s so unusual, and I think the market is in a bearish mindset now,” Irwin said. “Events have largely confirmed that so far, but I wouldn’t dismiss farmers’ concerns about what could happen late in this harvest season.”
Regardless of what happens, Irwin said he expects “wild volatility.”