U.S. farmers pursue soybean profits, shrug at tight wheat stocks
American farmers say they will plant more soybeans — a record 91 million acres — and less corn and spring wheat despite tight global wheat supplies that have been compounded by the Russian invasion of Ukraine. Russia and Ukraine are two of the world’s largest wheat exporters, and Ukraine is a leading corn supplier. The United States is the world’s largest agricultural exporter.
“The wheat market will remain tight unless we have a bumper wheat crop here and in Europe, and will likely stay tight until next year,” said Joe Glauber of the IFPRI think tank. Canada, Argentina, Australia, Kazakhstan, and even Russia could help with the near-term supply, he said.
While the invasion, with its implications for world food supplies, has driven up grain prices, it has not spurred U.S. farmers to expand crop areas or challenge corn and soybeans as the two most widely planted U.S. crops, said the Agriculture Department in its annual Prospective Plantings report. The USDA contacted nearly 78,000 growers during the first two weeks of March for the report, the first survey-based gauge of farm-level reaction to the war in Ukraine.
Facing high fertilizer prices, growers plan to shift away from corn and into soybeans. At 91 million acres, soybean plantings would be the highest ever, up 4%, or 3.76 million acres, from last year. Corn plantings would drop by nearly the same amount — 3.87 million acres, or 4% — to a total of 89.5 million acres.
It would be only the third time that soybean acreage exceeds corn acreage in the United States. With normal weather and “trend line” yields, farmers could harvest a record-large soybean crop this fall.
“We’re collecting this intentions information before farmers, in most cases, are in the field planting,” said the USDA’s Lance Honig during a webcast briefing. “And so there are some changes that can occur as we move through the rest of the season.”
Rather than expand wheat plantings, growers said they would pare their sowings of spring-planted wheat by 2%, to 11.2 million acres. It would be the fourth year in a row that plantings have declined. Spring wheat is grown mostly in the northern Plains and harvested in late summer. Farmers in North Dakota, the top state for spring wheat, said they would cut plantings by 5% from their 2021 level.
Winter wheat accounts for the lion’s share of the U.S. wheat crop, but it was sown last fall, long before the invasion of Ukraine or the clamor for higher global production. Winter wheat is dormant during the winter and harvested in summer. Some 69% of winter wheat territory, mostly in the central and southern Plains and the Pacific Northwest, is under varying levels of drought, according to USDA data.
Current world wheat stocks are the equivalent of a two-and-a-half month supply, the smallest stockpile in 14 years. Those calculations exclude China, which is credited with holding half of the wheat in storage in the world but rarely dips into its stocks and exports only negligible amounts of wheat.
The war is expected to throttle grain exports from Ukraine and Russia in the near term and could significantly slash Ukrainian production this year. A prolonged reduction in grain exports by the two countries “could exert additional upward pressure on international food commodity prices to the detriment of economically vulnerable countries, in particular,” said the UN Food and Agriculture Organization earlier this month. It estimated that globally, an additional 8 to 13 million people could face hunger as a result.
Farmers would plant 317.4 million acres to the two dozen “principal” U.S. crops, from corn and wheat to hay and potatoes, an increase of 214,000 acres from 2021 and in line with recent years, said the USDA. The combined total of corn and soybean plantings this year, 180.5 million acres, would be the same as last year.
“Again, no help from the United States in filling the potential hole in global wheat supplies this year by adding extra acres this spring,” wrote University of Illinois economist Scott Irwin on social media.
The Prospective Plantings report is available here.
The 57-page USDA executive summary of the Plantings and quarterly Grain Stocks report is available here.
A video of the USDA briefing on the reports is available here.