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USDA’s Acreage Announcement Is No Surprise

U.S. farmers scale back on corn and soy in face of flat prices.

WASHINGTON - U.S. farmers will plant 90 million acres apiece of corn and soybeans this year, paring back on plantings of their two major crops in the face of persistently low prices, said USDA chief economist Robert Johansson. For the first time in four years, growers will plant more wheat although barely more than last year.

At USDA’s annual Agricultural Outlook Forum, Johansson said soybeans would achieve acreage parity with corn, the longtime No. 1 crop, this year and “match or exceed corn area for much of the next decade supported by import demand from China.”

Wheat plantings are projected at 46.5 million acres, second-lowest on record to the 46 million acres planted in 2017. Johansson said strengthening market prices are expected to spur spring wheat acreage in the northern Plains.

U.S. farm exports are forecast for $139.5 billion, down by $1 billion from 2017, said Johansson, in updating the export forecast. Sales would be the fifth-highest on record and considerably below the mark of $152.3 billion set in 2015.

The USDA projections of corn and soybean plantings were in line with traders’ expectations and lower than the 91 million acres each that USDA projected last fall. The figures indicate a corn crop of 14.365 billion bushels and a soybean crop of 4.3 billion bushels, assuming traditional abandonment rates and trend-line yields. If so, the soybean crop would be the second-largest on record and the third-largest corn crop. Farmers planted a record 90.1 million acres of soybeans last year and 90.2 million acres of corn.

Agriculture Secretary Sonny Perdue said “our goal at USDA” is larger farm exports, which generate 20% of farm income. Acknowledging anxiety in the farm country over negotiations for the new NAFTA, Perdue said he was confident in President Trump’s leadership. “I believe he will at the end of the day, strike the best deal for the American economy, and that includes agriculture,” said Perdue.

NAFTA negotiations are to resume next week in Mexico City. Agricultural trade is a sticking point, particularly the U.S. demand that Canada dismantle its supply management system for dairy, poultry, and eggs.

Perdue told reporters, “We haven’t seen any direct retaliatory measures yet” by China against ag exports because of U.S. duties on steel and solar panels from China. He said USDA officials are discussing how to mitigate the impact in case China decides to put duties on U.S. sorghum. China recently opened a dumping investigation of the imports of the feed grain.

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