Down planted acreage provides market sentiment insight
An ag economist says total U.S. planted acreage is more than three million acres below the average from 2015 to 2018.
The University of Missouri’s Ben Brown blames the drop in USDA’s recent acreage report on high input prices outweighing strong crop markets.
“Even with these very strong prices, producers [are] signaling that the input costs and the run up in input prices that we’ve seen have tampered the excitment to get out and plant fence row to fence row,” he said.
He tells Brownfield a driver of the low planted acreage total of 316 million acres is a loss of two million soybean acres outweiging an increase of corn acreage.
“We added about 400,000 acres of corn,” Brown said. “Which, again, that’s adding supply to the balance sheet but if you’re a trader or a producer of corn, you’re – maybe – excited to see that we didn’t take all two million acres of those soybeans of those soybeans and turn them into corn.”
Brown said farmers could have ‘easily’ brought more acreage into production.
But, now that USDA’s June Acreage Report has passed, he says the market will be placing a greater emphasis on weather swings.
Brown said he’ll be closely watching how near-term weather will impact the corn market as Eastern Cornbelt farmers are expressing growing drought concern.
“They’re like ‘it’s dry enough here right now, even though we were so wet in May and early June, it is dry enough right now that if they don’t get some rain in the next week, they’re probably looking at some irreversable damage on their corn crop’,” he said. “And especially on beans that are just now sprouting.”
He tells Brownfield the Western Cornbelt is coming up on a critical stretch for corn production.
“There will be some parts of the country, especially in the Western Cornbelt, that’ll be pollinating here in the next couple of weeks when some of that dryness and drought could be at its height,” Brown said.