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USDA raises export forecast, projects increased soy, wheat plantings

The Agriculture Department on Thursday, Feb. 24, forecast U.S. ag exports to hit a new record this year and projected continued strong prices for major farm commodities while acknowledging that Russia's invasion of Ukraine has injected new uncertainty into world markets.

A combine harvests a golden field of grain. Much of the visible portion of the field already is in stubble. The sky is blue with fluffy white clouds.
A combine harvests grain.
Erin Brown/Grand Vale Creative

The Agriculture Department on Thursday, Feb. 24, forecast U.S. ag exports to hit a new record this year and projected continued strong prices for major farm commodities while acknowledging that Russia's invasion of Ukraine has injected new uncertainty into world markets.

USDA raised its fiscal 2022 estimate for ag exports to $183.5 billion, an increase of $8 billion from the November forecast. The old record of $172.2 billion was set in FY21.

USDA expects farmers to plant 92 million acres of corn this spring, which would be a slight decline from last year, while some 88 million acres of soybeans are expected to be planted, up slightly from just over 87.2 million acres last year.

Wheat plantings are pegged at 48 million acres, up from 46.7 million acres last year.

Cotton growers, who have been benefiting from strong global demand and soaring prices for their 2021 crop, are expected to plant 12.7 million acres, a 13% increase from 2021.

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As for prices, USDA is forecasting that corn prices will average $5 a bushel for this year's crop, a decline of 8.3% from the 2021 crop's average price but still well above the level where prices were prior to the turnaround in markets in 2020.

USDA projects the average soybean price for the 2022 crop at $12.75 a bushel, down from $13 a bushel. The 2022 wheat price is projected at $6.80 a bushel, down from $7.30. Cotton prices are expected to average 80 cents a pound, down from 90 cents on the 2021 crop.

Prices for livestock and poultry also are expected to be relatively strong this year. USDA expects cattle prices to average $137.50 per hundredweight, up from $122.40 in 2021. Hog prices are expected to average $65 per hundredweight, down from $67.29 in 2021 but still well above the 2020 average of $43.18. Broiler chicken prices are forecast at $1.13 a pound, up from $1.01.

Milk prices are expected to average $23.55 a hundredweight for 2022, up from $18.69 last year.

Given the strong global demand for commodities, spring weather will be especially important as farmers head for the fields, USDA Chief Economist Seth Meyer said in presenting the 2022 forecast at USDA's annual Agricultural Outlook Forum. "The markets are going to be sensitive to planning progress this year, given the tightness of markets," he said.

The forecast was developed prior to Russia's overnight attack on Ukraine. The Ukraine crisis and Russian export controls already had combined to push up wheat prices, Meyer said.

Soybean exports, meanwhile, are leading the surge in U.S. ag exports. Soybean exports are projected $2.9 billion higher to $31.3 billion because of higher market prices and reduced global supplies. USDA is now predicting that the U.S. will export 2.15 billion bushels of soybeans for the 2022-23 marketing year. That’s a 100-million-bushel increase from the current 2021-22 marketing year.

While USDA is predicting a larger soybean harvest this year, the department still expects lower ending stocks for the 2022-23 marketing year as exports and crush outpace 2021-22.

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American farmers are forecast to produce 4.5 billion bushels of soybeans this year, up slightly from about 4.4 billion last year, but U.S. exporters and crushers are going to need more for the 2022-23 marketing year, which begins Sept. 1.

China, looking at weather-related harvest problems in South America, is already buying up a lot of this year’s soybeans from the U.S. which haven’t even been planted.

USDA earlier this month cut its forecast for Brazilian soybean production this year to 134 million metric tons, a 5-million-ton cut from the January estimate. The USDA also reduced its forecast for Argentine soybean production by 1.5 million tons and trimmed the prediction for Paraguay by 2.2 million tons.

Still, USDA says it expects South American production to rebound in 2023.

“U.S. exports are expected to be relatively strong through the first half of the marketing year with the current drought in South America limiting their exportable supplies this fall,” the analysis released Thursday says. “However, with a higher South American harvest expected in early 2023, export competition in the second half of the marketing year will likely limit additional U.S. gains … Although current forward price opportunities will support prices received this fall, price expectations are likely to moderate later this year in anticipation of a rebound in production for South America in 2023.”

And USDA is expecting a record U.S. crush from this year’s harvest.

Rising demand for soy oil from the growing renewable diesel industry will be the prime driver of increased crush, says USDA.

“Soybean crush is projected to rise for the second year in a row to a record 2.25 billion bushels, largely driven by growing domestic demand for soybean oil and supported by meal demand growth,” according to the analysis. “Since early 2021, tight global vegetable oil supplies and increasing demand for biofuel feedstocks in the United States have led to higher soybean oil prices and increased demand for crush. The trend is expected to continue into 2022-23, with planned expansion of renewable diesel capacity to meet federal and state biofuel mandates.”

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USDA is forecasting the 2022-23 carryout will drop to 305 million bushels, 20 million bushels less that what’s expected for 20221-22.

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