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Despite coronavirus pandemic, farmers plan to plant a record corn crop
Spooked by the China-U.S. trade war, American farmers say they will plant so much corn that production could near 16 billion bushels for the first time. “We’ll be swimming in corn,” said economist Todd Hubbs of the University of Illinois.
Growers also could reap the fourth-largest soybean crop on record as plantings of the two dozen principal U.S. crops rebound from the rainiest spring in a quarter century in 2019, when a record 19.6 million acres went unsown. Mammoth corn and soybean harvests would depress market prices into fall 2021 and possibly beyond.
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Some 319 million acres will be planted to the principal crops, from corn, soybeans, and wheat to lentils and chickpeas, this year — up 5% from last year, according to USDA estimates released on Tuesday. Based on a survey of 80,000 operators, the annual Prospective Plantings Report said corn plantings would rise by 8% and soybeans by 10%. Wheat and cotton would hold steady. Large increases were forecast for rice, sorghum, barley, and oats plantings.
Analysts says the coronavirus pandemic, with most Americans under stay-at-home orders, put the agriculture sector into virtually uncharted territory with a recession looming. The key question, USDA chief economist Rob Johansson told USDA radio news was, “What will producers do if they see COVID-19 continuing to impact expected demand for products?”
Due to the trade war, “we’ve seen this stampede to corn,” said Hubbs’ colleague Scott Irwin during a webinar. “The evidence here is it’s continuing.” The trade war, which began to bite in mid-2018, disrupted exports of U.S. soybeans; 1 of every 3 bushels of the oilseed used to go to China. Farmers shifted to corn at the expense of soybeans in 2019 and lean that way this year, although factors such as futures prices say soybeans might be more profitable.
The “huge unknown,” said Irwin, is whether the coronavirus pandemic will interfere with shipments of supplies for the planting season, which will be in full swing within weeks. Corn requires more inputs, such as fertilizer, than does soybeans. “It will be interesting to see” if concern about the virus and its possible effect on transportation channels will steer more land to soybeans, he said.
Farmers indicated they will plant a larger-than-expected 97 million acres of corn, enough to produce 15.9 billion bushels, assuming normal weather and yields. The record is 15.1 billion bushels in 2016. A record harvest would overwhelm exporters, livestock feeders, processors, and ethanol makers to create the largest carry-over supply since 1988 when the 2021 crop was ready for harvest. Due to the pandemic, demand for gasoline is down, trimming the market for corn ethanol. But ethanol could rebound if travel gets the green light later this year.
At 83.5 million acres, soybean plantings would be the third largest ever and, with normal weather and yields, would yield 4.1 billion bushels, the fourth-largest crop on record. If exports return to the levels seen before the trade war, when half of the U.S. crop was exported, the carry-over could be a third of the record 909 million bushels of fall 2019.
Corn and soybeans are the two most widely planted crops in the nation. They would account for 56% of principal crop acreage this year.
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Irwin and Hubbs said they believed growers would plant somewhat less corn (95 million acres) and more soybeans (85 million acres) than the USDA estimates based on a survey during the first two weeks of March. If plantings hew to Irwin and Hubbs’ estimates, the average farm-gate price for this year’s corn crop would be $3.35 a bushel, the lowest in 14 years, and soybeans would average $8.60 a bushel, 10¢ less than the forecast for the 2019 crop.
At the same time the USDA estimated a surge in crop area, its quarterly Grain Stocks Report said the corn stockpile of 7.95 billion bushels was 2% smaller than traders expected.
The Prospective Plantings Report is available here.
The Grain Stocks Report is available here.