Soaring costs of growing corn is causing farmers to rethink whether they’ll plant more in 2009, according to a new survey by Farm Futures magazine.
While a big corn crop is again needed to meet growing demand, this early survey of 2009 acreage shows producers may not increase corn acres next spring, instead increasing soybean acreage as they are cheaper to grow.
The survey puts 2009 corn acres at 87 million, unchanged from USDA's latest estimate of 2008 acreage.
“Anecdotal reports from farmers indicate they’re concerned about the financial risk of growing corn next year, due to rising production costs," says Farm Futures Senior Editor Bryce Knorr, who directs the research. “Our survey would seem to suggest that 2009 crop corn prices must rise to attract the acres needed to meet demand.”
Farmers planted less corn in 2008, after record plantings in 2007, due to strong soybean prices. Soybeans again appear to be emerging as an attractive alternative in 2009, but this early trend indicator could be due more to costs.
“The ratio of new crop soybean to corn prices is much lower than it was last winter, suggesting cost, rather than prices, is driving farmers' decisions,” says Arlan Suderman, Farm Futures market analyst.
The survey shows another big shift towards soybeans, with initial intentions at 78.5 million acres, up from 74.8 million in 2008. Some of that ground could come from winter wheat, where fall plantings could be down, especially in the eastern Midwest where soft red winter wheat is grown. Cash prices for that crop have been persistently weak, despite historically high futures market prices. The Farm Futures survey showed the winter wheat crop at 45 million acres, down from 46.6 million in 2008.
Regional shifts also showed up in corn and soybeans. Growers in Iowa, Illinois and Indiana planned to increase corn plantings, while those on the edges of the Corn Belt, in more high-risk areas, were more likely to shift to soybeans.
Farm Futures surveyed 701 growers by e-mail from July 25 to Aug. 5.
Source: Farm Futures