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2016 Soybean Acres to Outpace Corn

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19/02/2016
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[dt_fancy_title title=”2016 Soybean Acres to Outpace Corn ” title_align=”left” title_size=”h2″ title_color=”title” separator_style=”disabled”]


2016 is looking to be the year of soybeans. Chris Hurt, Purdue University agricultural economist, is predicting corn acreage to be 1.5–2% lower and soybean acreage to be around 2% higher for the Midwest’s 2016 growing season. With Hurt’s soybean estimate hitting 84.8 million acres, a new record would be set for total U.S. soybean acreage.

Based on Indiana budgets projected for 2016, quality of land appears to have a $30–$40 better return for soybeans. Indiana is currently the fifth largest corn-producing state in the U.S. With lenders watching their farm clients closely and some putting restrictions on how much they’ll loan for operating capital, this could have a big influence on 2016 planting decisions.

“Soybeans are a bit lower input crop up here,” said Frayne Olson, crop economist from North Dakota State University. “I do think that’s going to start playing a role in farmers’ decision-making.”

This shift toward planting soybeans rather than corn has been happening since 2012. Hurt attributes the preference change to the Chinese demand for soybeans, amongst other factors. Although China’s demand is expected to be lower, soybeans have been offering farmers the best return over their variable costs.

Olson estimates that the strong number of wheat acres in his state will remain about the same, corn acres may drop a bit but not dramatically, and soybean acres will either remain the same or come in slightly higher than 2015. For North Dakota corn growers, the high input costs and risk of growing corn that far north deter farmers from wanting to pursue the crop. The state is currently ranked eleventh amongst corn-producing states.

Hurt and Olson are both watching South America closely, along with U.S. farmers. Prices for corn and soybeans will be influenced by what happens in South America over the course of the next 100 days or so. “I think the size of the crop coming out of South America will have a very heavy influence on what we do here in the U.S.,” said Olson.

Farmers are also thoroughly evaluating their expenditure and are trying to justify every dollar being spent, according to Hurt. This is leading to farmers questioning why seed costs haven’t fallen with crop prices.

“Farmers are frustrated,” said Olson. “But I don’t see seed companies making major changes in their pricing schemes.”

Olson encourages those looking at seed prices to not consider those values alone because there are often discounts based on time of purchase and order volume. He has had farmers saying the rebates they’re being offered are a bit better than last year, but the small adjustments haven’t made a significant difference.

“The frustration comes from the fact that seed cost escalated far beyond anything that would’ve been reasonable for inflation costs during the boom period when prices were going up,” said Hurt. “Farmers are under tremendous margin pressure.”

Purdue’s estimates found that a farmer paid $34 per acre for seed corn in 2005, on average Indiana farmland. In 2016, farmers are estimated to pay a whopping $123 per acre for seed corn, which is a 362% increase in price. Because soybean seed hasn’t seen as much genetic advancement, soybean prices have stayed more reasonable. In 2005, farmers paid $36 per acre for soybean seed. In 2016, they’re estimated to pay $74 per acre for soybean seed.

“Farmers need a way to get costs down, and they’re turning to input suppliers and saying, ‘how can you help me?’” said Hurt.

Fuente: Agriculture.com

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