Farmers Will Cut Corn Plantings in Favor of Soybeans in 2009

High costs and risk make soybeans a safer bet for wary producers.

Published on: Dec 11, 2008

Rising production costs and uncertain profit margins have risk-averse farmers ready to cut corn plantings in 2009 in favor of soybeans, which could see another substantial jump in popularity next spring, according to Farm Futures latest survey.

Corn acreage could fall 1% to 85.1 million acres, down from 85.9 million in 2008. However, harvested acreage might actually increase, because severe flooding caused farmers to abandon an unusually high number of fields this year.

Last winter tight stocks raised the ratio of soybean to corn prices to encourage farmers to plant 20% more soybeans. Current soybean to corn ratios actually favor corn, says Farm Futures Market Analyst Arlan Suderman. “But in these uncertain times producers appear reluctant to invest the extra dollars needed to plant corn,” says Suderman.

As a result, Farm Futures estimates soybean acreage could increase to a record 80.1 million acres in 2009, a jump of more than 5%. In addition to shifting corn acres, soybean could pick up ground from wheat, cotton, and land coming out of the Conservation Reserve.

Farm Futures puts wheat acreage at 61.7 million acres, down 2.2% from 2008. Winter wheat seedings appear to be down the most, to 45 million, compared to 46.2 million last fall, with spring wheat and durum each declining around 1%.

“Weak basis for soft red winter wheat apparently convinced farmers to cut back on seedings in the eastern Midwest,” says Farm Futures Senior Editor Bryce Knorr, who directs the research. “In the hard red winter wheat belt acreage seems to be up in northern areas, while falling on parts of the southern Plains that were dry.”

Farm Futures survey also sees little changes to corn and soybean estimates in USDA’s upcoming January crop report. Corn production is put at 12 billion bushels, based on yields of 153.5 bushels per acre.

In August Farm Futures estimated 2008 corn production at 12,061 million bushels, based on average U.S. yields of 154 bushels per acre. USDA’s last estimate in November put the crop at 12,020 million bushels with yields at 153.8 bpa.

For soybeans, Farm Futures estimates a crop of 2,931 million bushels, based on national yields of 39.4 bpa. USDA in November estimated soybean production at 2,921 million bushels, based on yields of 39.3 bpa.

“However, our data showed a fairly large degree of uncertainty over yields,” says Knorr, noting some of the corn crop is still out in the field, covered by snow. “There’s some chance corn yields could be lower, with soybeans actually higher than our survey averages.”

Farm Futures estimates were released Thursday morning at the first of two annual Management Summits in St. Louis. The second summit takes place Jan. 21-22 in Indianapolis. More information on the meetings can be found at www.FarmFutures.com.

Farm Futures surveyed 840 growers by email from Nov. 24 to Dec. 8.