USDA forecast | Wheat, soybean and corn acres are replacing traditional crops
KISSIMMEE, Fla. — A synopsis of the U.S. Department of Agriculture’s 2013 wheat, soybean and corn acreage forecast goes something like this — big, bigger and massive.
The USDA is forecasting a combined 230 million acres of the big three crops, which is almost identical to last year when farmers planted the highest area to wheat, soybeans and corn since 1982.
Record high prices have encouraged farmers to seed 10 million more acres to the three crops than they were three years ago.
So where are the extra acres coming from?
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Some of it is coming from land that was formerly in the conservation reserve program. The USDA is forecasting 27.1 million acres enrolled in the CRP, down 9.7 million acres from its peak in 2007.
However, corn and soybeans are also making gains at the expense of cotton and rice, two traditional crops for growers in the southern United States.
Danny Murphy, president of the American Soybean Association and a grower from Canton, Mississippi, thinks farmers will grow 250,000 acres of cotton in his home state this year, which would be less than half of the 550,000 acres grown last year.
That’s 300,000 cotton acres up for grabs in just one state.
“I would expect that to be divided between corn and soybeans in our state, and I would imagine many of the other southern states would be similar,” he said during a news conference at the 2013 Commodity Classic.
The USDA is forecasting 10 million acres of cotton in 2013, down from 12.3 million acres last year. The National Cotton Council of America expects an even bigger drop to nine million acres. U.S. growers were planting nearly 16 million acres of the crop at the turn of the century.
Murphy said cotton isn’t price competitive with corn and beans. Farmers were signing contracts of $1.25 to $1.50 per pound two years ago, but today’s going rate is a disappointing 80 cents per lb. It’s also an expensive crop to grow.
“At the kind of prices we see today, it’s not competitive,” said Murphy.
“Price is the best fertilizer there is for producing crops.”
Rice acres are also down, although the drop hasn’t been nearly as pronounced. The USDA is forecasting 2.64 million acres, down from 2.7 million last year and 3.06 million at the turn of the century.
Murphy said rice is also expensive to grow, and farmers are increasingly confronted with water constraints. It is also a politically sensitive crop. Cuba and Iran were once big markets for U.S. rice, but both have been lost.
The head of the American Soybean Association laments the migration of cotton acres to competing crops such as corn and soybeans.
“There are reasons we’ve planted cotton for 150 or 200 years in the south. It’s a well adapted crop to the south,” he said.
Murphy wonders if cotton and rice acres have declined enough that a price bump is in order.
