Are There Acres Missing from the USDA's Prospective Plantings Report?
The USDA's Prospective Plantings report released on March 31 revealed that U.S. producers intend to plant 91.7 million acres of corn and 81.5 million acres of soybeans. The soybean acreage was near market expectations but the corn acreage was about a million acres less than expectations. The smaller than expected corn acreage has prompted considerable discussion about the possibility of the USDA survey undercounting total acreage and this is the reason for the "low" figure for corn. The purpose of today's post is to examine the data and see if there really is a case to be made for missing acres in this year's Prospective Plantings report.
The logical starting point for the analysis is the total acreage planted to principal crops in the U.S. Principal crops include planted acres of corn, sorghum, oats, barley, rye, winter wheat, durum wheat, other spring wheat, rice, soybeans, peanuts, sunflower, cotton, dry edible beans, potatoes, canola, proso millet, and sugarbeets as well as harvested acreage for hay, tobacco, and sugarcane. The total should also include double cropped acres and unharvested acreage of small grains planted as cover crops. The estimate of this overall total for 2014 from the just released Prospective Plantings report is 325.9 million acres, and it is based on the USDA's March Agricultural Survey of approximately 84,000 producers that was conducted between February 27 and March 18, 2014.
The estimate of intended acreage of principal crops is 1.1 million acres larger than acreage of those same crops of a year ago and the second largest in 13 years. The largest acreage of principal crops in that period was 326.3 million in 2012. Even though the planned acreage of these crops is large by recent standards, it is possible that the estimate does not account for all the available crop land in 2014. The potential for an undercount stems from two basic sources. The first is that acreage enrolled in the Conservation Reserve Program (CRP) in 2014 is about 1.7 million acres less than enrolled in 2013. Since acreage coming out of the CRP was in crop production at some time in the past, it is thought that much of that released acreage will be cropped in 2014. The second reason for a possible undercount stems from the large amount of acreage that was prevented from being planting in 2013. Producers enrolled in federal farm programs reported to the USDA's Farm Service Agency (FSA) that 8.3 million acres of crop land qualified as prevented planting acres in 2013 due to adverse weather conditions that extended beyond acceptable planting dates. Since 2007 prevented planted acres reported to FSA have ranged from 1.2 million acres (2012) to 9.6 million acres (2011). It was believed that producers planting intentions this year would reflect intentions to plant all acreage, that is, to have no prevented planted acreage.
It is possible that the combination of fewer acres enrolled in the CRP in 2014 and plans to plant all acreage would result in intentions for all principal crops exceeding last year's acreage by much more than 1.1 million acres. The magnitude of the potential shortfall in acreage intentions relative to expectations is illustrated in Table 1 and Figure 1. In 2013, the total acreage of principal crops, prevented plantings, and acreage enrolled in the CRP was estimated at 362.6 million acres. The general expectation was that the total would be about the same in 2014. With 1.7 million fewer acres enrolled in the CRP and expectations for minimal prevented planted acreage, planting intentions for 2014 were expected to be much larger than in 2013. However, the total of planting intentions and enrollment in the CRP was 9.7 million acres less than the total of all acres in 2013. The sum is 3.3 million acres less than the smallest acreage total since 2007. These large differences lead some to the conclusion that not all of the crop land acreage was accounted for in the March report and that the USDA's June Acreage report later this year would reveal larger plantings, even if some acreage is prevented from being planted this year.