(Agrimoney) – US farmers will plant more corn in 2016 than previously thought, encouraged by an improved price outlook, and more soybeans too, at the expense of the likes of cotton and wheat, for which value prospects have deteriorated.
The US Department of Agriculture, in revised forecasts for the long-term outlook for US crops, forecast corn plantings recovering by 2.1m acres to 90.5m acres next year, above the 90.0m acres pencilled in in projections made earlier this year.
The forecast, which compares with the 90.1m acres expected by Informa Economics, reflected a forecast for prices which, while forecast to remain well below levels reached earlier in the decade, have improved since the US made its previous estimates, in February.
Farmers are expected to receive an average of $3.60 a bushel for their 2016 corn for their next harvest, down a modest $0.05 a bushel year on year, but above the $3.50 a bushel previously expected.
Returns are expected at $262 per acre, $10 per acre above the last forecast, reflecting lower expectations for input costs, amid a struggle among agrichemicals and fertilizer companies.
Forecasts for both returns and prices higher out for the next decade too – a reflection of an expectation that yield growth, and hence supplies, will not grow as fast as had been expected.
Higher returns
For soybeans too, farmers will, at 82.0m acres, grow more of the oilseed than had been expected – by 3.0m acres.
Even so, the forecast is below the record 85.3m acres that Informa has pencilled in.
The USDA estimate reflected, again, improved prospects for US farmers’ returns, seen at $229 per acre next year for soybeans, up $15 per acre from the previous forecast.
The estimate for farmgate soybean prices was nudged higher by $0.10 to $8.65 a bushel, although still down $0.35 a bushel year on year, with lower estimates for variable costs also boosting profitability.
Lowest since 1970
However, for wheat, the estimate for sowings ahead of the 2016 harvest was held at 53.0m acres, with a decline to 51.0m acres seen in 2017-18.
That would be the lowest plantings in 47 years, and 1.5m acres below the previous forecast.
The USDA data flagged in a weaker trajectory for farmgate wheat prices than it had in February, seeing them fall to a nine-year low of $4.40 a bushel next season, and $4.50 a bushel in 2016-17 – both estimates downgraded $0.25 a bushel.
Prospects for returns were lower too, at $82 per acre for next season and $86 per acre in 2016-17, both downgraded by $5 per acre.
The figures were well below the $193 per acre seen in 2013-14, when farmers took an average of $6.87 per bushel on their wheat.
Less keen on cotton
And for upland cotton, the USDA lowered its acreage forecast for next season, and for the next decade ditching ideas of a return to 10.0m acres longer term.
For 2016-17, sowings will come in at 9.5m acres, a downgrade of 300,000 acres, if above the 32-year low of 8.4m acres recorded this season.
For the fibre too, the USDA lowered price forecasts, seeing them average 58.0 cents a pound next season compared with a previous figure of 60.5 cents a pound.
The estimates came in an initial slew of forecasts for US crops out to 2025, with a fuller report including global data, and commentary, to be released in February.
