Coming off a disastrous crop year in 2019 farmers were looking forward to a new planting season with optimism that the worst was behind them. However, continued uncertainty about weather and the grain and energy market response to the COVID-19 outbreak and meltdown in the stock market has left more questions about what farmers will plant this spring.
At the U.S. Department of Agriculture Ag Outlook Forum in February, the agency pegged baseline corn acreage for 2020 at 94 million acres, 85 million acres on soybeans and 45 million acres on wheat. The row crop figures represent an increase from 2019, which saw record prevented plant acreage in the United States at nearly 20 million acres decrease harvested acreage.
Corn acreage estimates in the private firms have been as high as 97 million-plus acres as many farmers are looking to increase corn-on-corn acres. That is the case in Iowa where Rock Rapids farmer Dean Meyer says corn is still king.
“There will be more acres of corn than last year. Conditions seem pretty friendly especially versus last year and farmers like to plant corn," he says.
However, other areas of the northern Corn Belt are much wetter, which leaves skepticism that Mother Nature will cooperate enough to allow farmers to plant that much corn. Chip Nellinger, owner of Blue Reef Agri-Marketing, agrees the high corn planting estimates are in question right now.
“Out of the Dakotas and Minnesota if it stays wet, you know they have so many problems up there. Snow on the ground, corn and beans still in the field. Yes, you could shave a million acres out of that pretty easily," he says.
South Dakota Corn Growers Association President Doug Noem noted farms near Bryant in the northeast part of the state where they had heavy snows over the winter and the lakes are above full. He says there is nowhere for any moisture to go this spring.
“Even northern South Dakota, from the middle of the state going north, has a lot of snow and they have standing corn in places where they couldn’t harvest because there was too much water," he says. "Those acres for sure won’t get planted because they’re just going to be too wet, too.”
The other factor that may limit higher corn plantings is price. Corn futures dropped to new contract lows on March 18, drug down by the sharp correction in crude oil and unleaded gas prices which in turn pushed ethanol prices to record lows. With negative margins for ethanol plants, lower production is anticipated, and that also weakened corn basis levels. While the corn soybean price ratio still favors corn, this may discourage some acres.
Matt Bennett with Agmarket.net says there are also some farmers that won’t be able to pay the higher cost for inputs to put corn in and may have to opt for soybeans.
“The crop insurance price being more than a dime below last year, even though we’re getting a little bit of a backing off of fertilizer prices and diesel fuel prices, I still don’t think guys are going to be super excited on fringe or marginal acres to push acreage,” he says.
Farmers additionally may not be able to get the financial backing to put in a corn crop and instead will be advised to plant soybeans.
“I don’t know if the cash is going to be there and so do people want to plant soybeans? Maybe not, but there might be people telling them that they’re going to have to plant soybeans. So, I could see 85 to 86 million acres on soybeans,” Bennett says.
However, soybeans don’t look profitable with current prices either, Meyer says, and that’s why they’re looking at planting corn. Plus, farmers can at least market corn through livestock.
“The economics is why I question whether these beans are going to go in the field," he says.
Despite farmers best planting intentions, in the northern Corn Belt the wet conditions may force some of those operators to take prevented planting in 2020, which will also influence the acreage mix.
“Oh I think you see substantially less prevented plant than 2019, but at the same time, take last year out of the mix and I think it will be the most PP we’ve seen in quite some time if this weather continues like it is and these prices continue like they are," Bennett says.
Plus, there is no incentive to plant from a price or agronomic standpoint.
“There was a lot of push last year to plant corn after the last planting date which was May 25. I don’t think you’re going to see that this year. If we get there, I think people are going to put the planters away and quit," Noem says.
In the acreage battle, one crop that has been losing out is wheat, as prices are far below the cost of production. As a result, total wheat acreage is forecast to be at historically low levels again in 2020.
“We are at a 100-year low in plantings," says Ben Scholz, president of the National Association of Wheat Growers. "It goes back to the early 1900s to see acres planted to this level, and of course we grow more wheat per acre than we did at that area of time.”
Winter wheat seedings were down again last fall and they aren’t optimistic about spring wheat plantings, with the saturated soils and corn still in the field in the top hard red spring wheat state of North Dakota. The disastrous quality issues faced in the state in 2019 will also deter some plantings.