FBN expects fewer corn acres in 2022
The 2022 crop mix is shaping up to be a wild ride as farmers try to adjust cropping practices with soaring input prices and volatile crop prices, says Kevin McNew, chief economist at Farmers Business Network (FBN).
McNew spoke to Successful Farming on March 29, the day after FBN unveiled its 2022 Plantings Report.
In the report, FBN projects 2022 crop acres will total:
- Corn: 91.1 million acres
- Soybean: 89.2 million acres
- Sorghum: 7.0 million acres
- Cotton: 12.4 million acres
- Rice: 2.5 million acres
- Winter wheat: 34.4 million acres
- Spring wheat (non-durum): 11.2 million acres
- Durum: 1.8 million acres.
FBN’s 91.1-million-acre corn estimate is below the crop trade expectation of 92 million acres, because the prices farmers can receive to plant competing crops is alluring, McNew says.
“It’s not just a corn/soybean calculus that farmers are going through, although that’s the case in Iowa and Illinois. But in the Northern Plains, for example, there is spring wheat. In the Southern Plains, there is cotton,” he explains.
Factor in the cost of fertilizers, which is a huge line item for farmers producing corn, and farmers in states where corn is less efficient at turning nitrogen fertilizer into corn will be tempted to look elsewhere. Those include North Dakota, Colorado, and Texas.
Corn and Soybean Outlook
McNew says the corn acre decline from 93.4 million acres in 2021 to 91.1 million acres in 2022 sends a bullish signal to farmers.
FBN expects North Dakota farmers to drop corn acreage by 472,000 acres.
Key corn-producing states that will lose acres include Iowa (-206,000), Illinois (-198,000), Nebraska (-178,000), and Indiana (-162,000).
FBN says the market signal for soybeans is neutral, with 89.2 million acres of soybeans expected to be planted in 2022, vs. 87.2 million acres last year. North Dakota growers will plant nearly 798,000 acres more of beans in 2022; elsewhere, the “I” States also will plant between 187,000 and 265,000 more acres this year.
McNew expects farmers to plant about 200,000 fewer acres of spring wheat in 2022; they’ll choose instead to plant pulse crops, which are valued quite high right now.
“We saw North Dakota and Montana farmers backing off of spring wheat at a time when the overall market expectation is a sizable increase in spring wheat acres. We’re quite a bit contrary to what the market thinks,” he explains.
Sorghum acreage also surprised McNew. Farmers planted 7.3 million acres of grain sorghum in 2021, and the number should remain about 7.0 million acres in 2022. While Texas farmers will shift about 300,000 sorghum acres to cotton, Nebraska, Oklahoma, Colorado, and Kansas are expected to stay steady or increase acres, probably due to dry conditions in those states, and a lower production cost per acre of grain sorghum vs. corn.
McNew remains bullish on crop prices in 2022.
“Our take is that we don’t think there is any reason for the market to fall out of bed. We’ll have days of pain that will knock some premium out of the market, but there is no path to $4 corn and $8 beans. What we see from the USDA plantings report on March 31 won’t derail this bull market.”