Markets, spring weather look promising for farmers

Grain farmers are cautiously optimistic about the outlook for 2021, following a strange 2020.

The U.S. Department of Agriculture’s Prospective Plantings report, released March 31, said corn planted in 2021 is estimated to be about 91.1 million acres, up less than 1% from 2020. Soybean acreage is expected to be about 87.6 million acres, up about 5% from last year.

These numbers are down from the USDA’s February estimates of 92 million acres for corn and 90 million acres for soybeans.

The survey-based report also said Ohio is expected to plant 5 million acres of soybeans and 3.4 million acres of corn. Pennsylvania is planning 640,000 acres of soybeans and 1.48 million acres of corn.

After the report’s release, corn prices jumped 25 cents to above $5.60 and soybean prices jumped 70 cents to above $14.30 per bushel, according to a March 31 American Farm Bureau Federation analysis.

The report doesn’t necessarily have much of an impact on what farmers choose to plant, but it does affect the markets.

John Harrell, of Harrell Custom Services, in Lebanon County, Pennsylvania, keeps an eye on the reports because of their impact on commodity prices. After this most recent report came out, he was able to capture some fall harvest contracts. He’d been waiting for futures to come up before locking in pricing.

“That report was pretty significant,” Harrell said. “We’ve got a little bit of a floor now for our 2021 crop.”

Prices

Harrell, who is also chair of the Pennsylvania Soybean Board, plants corn, soybeans and wheat in a rotation. One year, he plants corn on a field, and the next, double crops wheat and soybeans.

“For me, it’s mostly agronomics,” he said. “It doesn’t make a big impact on me when we start talking pricing.”

Commodity prices for both corn and soybeans are higher than typical. Jeff Magyar, of Magyar Farms, in Ashtabula County, Ohio, said while the report and commodity prices won’t affect his planting decisions, higher soybean prices might sway some farmers into planting more soybeans than corn — soybeans are cheaper to plant.

“I pay attention to [the report] only because it affects the market,” said Magyar, also a member of the Ohio Soybean Association board. “The weather will have more to do with what farmers will plant in 30 days than that report.”

Weather

So far, the spring weather has looked promising for farmers in the area. The report noted that despite a cold February, the winter was fairly mild overall.

Magyar said it’s been relatively dry near him, which has allowed him to start working on his fields over the last month or so.

“Normally, we’re wondering when we can get into the field,” he said.

Harrell has also had fairly dry conditions, which has been good for getting pre-planting work done.

“I think field conditions are looking good,” he said.

Concerns

Around this time in 2020, Magyar was concerned about the corn market, with the pandemic complicating markets and supply chains, but things ended up pretty typical for him. Harrell also raises hogs and had a few challenges with sending hogs to market, but only one or two loads of hogs were really affected.

“Markets are always volatile,” Harrell added. “I can’t say that I foresee any … issues, per se, as far as our operation.”

A few pandemic and trade related concerns linger for some farmers. Magyar ships soybeans to Japan, and right now, supply chain issues are making it difficult to get enough containers for shipping, not just for agriculture, but for other industries as well.

Harrell is concerned about the amount of supply being sent to China, now that tariffs have scaled back somewhat.

“When the tariff tax hit, obviously we realized that we relied in China maybe a little too much,” he said. “Now, when you look at what we are moving there … I’m glad we’re moving that much there, [but] it concerns me if that is going to keep up throughout the year.”