WEST LAFAYETTE, Ind. – Farmers putting their ears to the ground today could be harvesting more ears of grain from it later this year.
Producers are expected to shift their focus back to corn and away from soybeans when planting begins in a few months, said Chris Hurt, Purdue University agricultural economist.
Farmers also committed more acres to wheat this past fall – a crop that for decades had been vanishing from the farm landscape.
Crop shift. Despite a recent USDA report indicating U.S. grain stocks are not as tight as previously thought, market conditions are ripe for a return to corn and wheat.
Whether the weather provides additional impetus for crop shifts in 2003 remains to be seen, Hurt said.
“I think we’re going to see lower acreage on soybeans this year, and some of that is going to move over to the corn column,” Hurt said.
He expects to see about a 1.5 million to 2 million acre increase in corn nationally.
Beans will probably drop somewhere in the range of 4 percent in acreage for this coming year.
Will match use. “With normal weather, corn production should approach 10.1 billion bushels – that’s about our usage for this next year. Currently, USDA is estimating that the 2002 crop will average about $2.40 a bushel. As we go through this winter I think we’ll see a better pace on corn exports.”
Any weather uncertainty could provide modest price support, Hurt said, however he doesn’t anticipate large price rallies. Spring and summer weather will be the next big focus for potential price impact.
Corn down in 2002. U.S. corn production was 9 billion bushels in 2002, down 5 percent from 2001. Although planted acres rose 4 percent to 79.1 million acres, yields fell 6 percent.
Meanwhile, U.S. soybean production dropped about 5 percent, to 2.73 billion bushels. Farmers planted 73.8 million acres of soybeans in 2002.
Planting decisions and crop yields in the Eastern Corn Belt states were altered dramatically by nearly constant rain during the critical planting months of April and May.
Because corn’s ideal planting period falls earlier than soybeans, many farmers either switched to soybeans or abandoned their fields altogether.
Warm and dry spring? This coming spring could prove different. Long-range weather forecasts call for a warm and dry spring.
Such a weather pattern could motivate farmers to plant early, favoring additional corn acres, Hurt said.
Western drought. A wild card is an ongoing drought in the Western Corn Belt – a drought that is slowly moving east.
“We’ve still got a lot of the drought left over from 2002,” Hurt said. “It has never truly abated in the Great Plains, and we’re now seeing northern Illinois, most of Iowa and Missouri, and even northern Indiana, added to the dry weather concerns.”
Price forecast. Currently, Hurt estimates the average price at harvest for 2003 crop corn at nearly $2 a bushel.
U.S. soybean acres could drop sharply if production in competing nations is as high as expected, Hurt said.
“The soybean situation depends on South America,” he said. “If that crop comes in normal, I think we stand some reasonable chance of seeing lower prices to the tune of 20 cents to 30 cents going into March and April, and then a market that struggles somewhat on into the spring.”
However, “the pace of exports remains quite good,” Hurt said. “China is a big buyer of soybeans.
“And any kind of weather concern in South America could well cause us to move to higher prices on beans and establish new highs for beans this year. But time is running out for growing problems there.”
Hurt projects average soybean prices of $5.50 per bushel in Indiana for 2002 crop and near $5 per bushel at harvest for 2003 crop.
A return to normal world wheat yields in 2003 likely will lead to declining prices, Hurt said.
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