Every year there is a need for one commodity or another to buy acres going into the spring planting season. What makes this year different is that so many crops are competing for acres.
While corn and soybean prices are at seven- to eight-year highs, spring wheat is also fighting for acres, and even specialty crops like canola are getting in on the action with prices at near to record highs. Add in skyrocketing fertilizer prices, and this spring gets even more interesting.
The U.S. Department of Agriculture and early trade guesses indicate U.S. farmers are expected to plant a record of more than 90 million soybean acres, up around 7 million from 2020. This is due to historically tight ending stocks at 120 million bushels and prices not seen for several years. Where those acres will come from depends on the state.
In Iowa, agronomists like Kevin Rozenboom, who is also a precision ag specialist with Farmers Coop Society in Sioux Center, anticipates some acreage shifts.
“It does look like some of those acres might switch back to soybeans instead of a corn-on-corn rotation just where the price point is and the potential yield,” he said.
He said soybean yields have historically been improving and that has increased revenue per acre. Some agronomists have also warned the corn acres in Iowa that were flattened by the historic derecho in August 2020 will not be able to go back to corn, but instead will end up being planted to soybeans.
In Minnesota the acreage shift may be similar. Bob Worth farms near Lake Benton, and while he is sticking with his 50-50 corn-soybean rotation, he thinks there are others who may deviate from the norm.
“The people that might change are the people that are planting corn on corn on corn," he said. "There might be a possibility that they go take some of those acres and move them to soybeans because soybeans are profitable.”
South Dakota is also looking at more soybean acres in 2021, but not all of those acres will come from corn.
“For South Dakota specifically, they’re anticipating more acres of beans again this year, and I think maybe some of that will come out of wheat acres,” said Centerville farmer Tim Ostrem.
That is especially true in areas that planted winter wheat, as the condition of that crop has deteriorated over the winter with the expanding drought. Some of those acres may be abandoned in the spring.
USDA’s early projections from the recent Ag Outlook Forum put all wheat acres at 45.3 million, up nearly 1 million from 2020. However, private estimates so far are at 46.41 million, which is up 2 million from last year. The big keys will be how much of the winter wheat crop is destroyed with the lower crop ratings compared to a year ago, plus where spring wheat seedings fall. Allendale’s annual farmer survey put spring wheat at 12.25 million acres, up just 215,000 over a year ago.
The trade is also estimating roughly 2 million more acres of corn will be planted in the U.S., at just shy of 93 million acres. However, with skyrocketing fertilizer prices, that may be a tough lift for those who didn’t make applications last fall.
Valley Springs, S.D., farmer Jordan Scott said his operation is locked into corn.
“Yeah, we had a good fall so we were able to get all of our fertilizer on, so we had our decision made for us kind of that way. So we’re not going to adjust or plant more beans or less this year,” he said.
Another wild card is what farmers seed into prevented plant acres. South Dakota had roughly 1.3 million prevented planting acres, while North Dakota had around 3 million. Those acres will likely come back into production with the dry soils this winter.
Rick Swenson, agronomy lead at Peterson Farms Seed, said the company is already seeing certain trends in their sales.
“If you get into northern Minnesota and across North Dakota, there is some changes there. Some of the dry bean acres are down, so soybeans are up a little bit and especially the corn," he said. "There’s some guys in central North Dakota, there’s a lot more corn booked right now than there was a year ago. A lot of that has to do kind of with the PP we fought in '19 and '20.”
So, the market may still have some work to do to buy the acres each commodity needs, especially corn versus beans.
“If we see a little bit more rally in the market, and beans get to that 2.5-to-1 threshold or even a little bit higher, I think we might see it move a little bit more towards soybeans," said Braedon Hinker, Pioneer territory manager. "But I think it’s going to take that higher end to get there.”
But Mother Nature may have the last say, especially with drought conditions in much of the western Corn Belt. The first look at what farmers' intentions are will come on March 31 with USDA’s Prospective Plantings Report.