Corn to Be King Again in the U.S., USDA Report Shows
American farmers will make corn king again as the most widely planted U.S. crop in 2019, expanding corn acreage by 3% while slashing soybean area by 7% due to a trade war that has driven down market prices and ballooned soy stocks, said the USDA on Friday. Wheat sowings would rise by 7%, according to USDA's baseline projections.
With normal weather and yields, USDA's projected corn plantings of 92 million acres would bring a crop of 14.93 billion bushels, the second-largest ever, and soybean plantings of 82.5 million acres would result in a crop of 4.09 billion bushels, 600 million bushels less than this year's record-setting crop but still the fourth-largest on record. The wheat crop, sown on 51 million acres, would total 2.06 billion bushels. Corn prices are strengthening, suggesting it will be more remunerative than soybeans, where prices are expected to improve marginally for the 2019 crop, said USDA.
Net returns over variable costs would be $344 an acre for corn and $273 for soybeans based on expenses nationwide. The USDA does not project fixed costs for crops. With the Sino-U.S. trade war hobbling soybean exports, the USDA put the kibosh on speculation of a neck-and-neck race for acres between corn and soybeans, driven by strong global demand for soybeans, especially in China. Soybeans were – barely – the most widely planted crop this year.
Beginning with 2019, USDA projects corn area will run 9 or 10 million acres ahead of soybeans through 2023. The soybean carryover is forecast for a record 885 million bushels at the end of the current trading year. It would take six years to work it down to nearly 300 million bushels, according to USDA projections. The carryover was 302 million bushels at the end of the 2016/17 trade year. The soybean crop set ever-larger records in 2016, 2017, and this year.
Midwestern corn and soybean farmers will turn a profit this year, aided by higher-than-normal yields and Trump tariff payments from USDA, said two University of Illinois economists early this week. Losses are likely in 2019 even with above-average yields. “When trend yields again occur, a great deal of financial stress will be felt in Illinois and across the Corn Belt more generally, particularly if there is no significant positive price response to those lower yields,” said economists Gary Schnitkey and Krista Swanson at the Farmdoc Daily blog.