Farmers are juggling a lot of balls that are currently in the air.
Fertilizer prices have doubled for some and tripled for others. China is backing off importing U.S. grain. Crop protection chemicals may be in limited supply next spring and summer, with prices that could be outlandish. Repair parts are unavailable. And South American competitors in corn and soybean production are preparing for a record crop.
And the balls are all headed down and need to be caught, which means preparations are imminent for the 2022 corn and soybean crop. So, what makes a good plan for corn and soybean acreage that does not allow any of the balls to drop?
Many, no most, projections for spring planting expect farmers to reduce their corn acreage because of the high price of nitrogen and other fertilizers. Some market analysts have wondered if even enough corn would be planted to supply the demand, domestically and also for export customers. Some have suggested corn acreage might slip below the 90 million acre mark, more than 3 million less than what was planted in 2021.
University of Illinois agricultural economist Scott Irwin is shaking his head. Looking at the advantage, minimal as it currently is, that corn prices have over soybean prices when comparing fall 2022 futures contracts, Irwin is projecting a 96 million acre corn crop to be planted in the spring. Acknowledging the uncertainties and all the things that can change, he says despite high fertilizer costs for corn, they are similar to soybeans.
His contrarian forecast is for increased corn acres in 2022 and fewer soybean acres than the 87 million planted last spring, with a potential slippage to 85.5 million.
“The data leads us to look for an increase in corn acres (in 2022), which is different than what the market seems to be expecting,” Irwin says. U of I models suggest total U.S. crop acres — about 70 percent of which are in corn, soybeans and wheat — could increase from 319 million this year to 326.5 million next season.
Since Irwin brought wheat into the discussion, Purdue ag economist David Widmar suggests using wheat acreage to determine corn and soybean acreage.
Widmar says if wheat acreage for 2022 declines, that means more corn and soybeans are being planted. If farmers planted more wheat acreage this fall, that means less corn and soybeans will be planted next spring.
Wheat acreage has been on a rip and a tear downward for the past 30 years, but that may have turned around this fall with a near doubling of winter wheat prices.
And leaning in Irwin’s direction, Widmar says, “It’s entirely possible that changes in wheat, cotton, or prevented plant acreage could be a bigger factor in the allocation of corn and soybeans than fertilizer prices. This isn’t to understate the challenges surrounding fertilizer prices but to point out other factors, such as winter wheat acres, which could be at risk of being overlooked.”
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Stu Ellis is an observer of the Central Illinois agriculture scene. In addition to his weekly column, you can view his “From The Farm” and “Harvest Heritage” reports on WCIA 3 News.