Crops fill up U.S. fields
It’s plain from the United States Department of Agriculture’s June acreage estimates just how much extra acreage farmers planted this year once Uncle Sam got out of the way.
After more than a year of wrangling, the U.S. government eventually compromised and passed the Republican-authored 1997 Farm Bill in late April, just as corn, soybean and spring wheat farmers were preparing to sow.
The so-called Freedom to Farm bill allowed farmers to plant as many acres as they farmed, without fear of losing benefits under the farm program.
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The result? Farmers told USDA they plan to plant 80.4 million acres of corn, the largest crop since 1985 and 63.4 million acres of soybeans, the largest since 1984.
But the real eye opener is spring wheat. Spurred by the best prices since the late 1970s, farmers in the Upper Great Plains kept on planting through a wet spring. They seeded 20 million acres of dark northern spring wheat, the largest acreage since 1936. That’s an 18 percent increase from last year alone.
“The markets are pretty alarmed at that,” said Tom Jackson, an analyst with the WEFA Group in Pennsylvania, referring to the slide in spring wheat prices on June 28. “They didn’t quite expect that much spring wheat.”
But two of the crops that didn’t get the same attention from farmers as wheat are barley and oats.
Barley acreage increased modestly to 7.13 million acres, while oats acreage actually decreased by 38 percent to 4.67 million acres.
“It’s a question of which crops are more profitable,” said Jackson. “There’s a little more profit with wheat and corn.”
But with fewer U.S. acres of cereal feed grains and tighter-than-expected stocks of corn, another WEFA analyst, Shawn McComb, said that opens the gate for Canada.
McComb, who concentrates on analysis of international markets including Canada, said there’s certainly going to be more opportunities for Canada to sell feed grains to the U.S. at a higher price for a longer period of time than what was expected this spring.
“The long and short of it is we’re tighter than we thought we were going to be two or three months ago.”
McComb said with the WGTA gone, the U.S. and Japan will be the primary destinations for Canadian feed barley. He doesn’t however, see the strong prices lasting into the 1997-98 crop year.
High feed prices are forcing livestock producers to liquidate, he said. By next spring there will be fewer animals to feed, which will put a dent in the cash price of barley at Lethbridge.
