(WCIA) — The U.S. Department of Agriculture surprised everyone Wednesday.
The USDA asked farmers on March 1 what they expected to plant this year, and those expectations were quite different than what the grain markets expected.
Corn and soybean prices have been rising since last August because of Chinese and global demand for U.S. grain. That has caused supplies to decline, and the grain trade thought farmers would plant upwards of 93 million acres of corn and 90 million acres of soybeans to capture those higher prices.
Here’s the surprise: The USDA reported farmers would plant just over 91 million acres of corn and less than 88 million acres of beans. While those were more than last year, they were well under what was expected. The result was a maximum 25-cent jump in the corn market on Wednesday and the overnight trading continued higher.
In the soybean market, prices rose the 75-cent daily limit, and have settled there in the overnight trading.
The question everyone is asking is why farmers were not planting corn in pastures, and front yards with prices at 7-year highs.
Some have said higher crop production costs overshadowed the higher crop revenue. Others have said wind farms and solar farms have reduced their acreage. And yet others have said they’ll spread their risk with other crops that also are getting good revenue such as wheat and hay.
Interestingly, in the heart of the Corn Belt, corn acres are down from last year by 400,000 acres in Illinois, and 200,000 acres each in Iowa and Indiana. Cornbelt states generally pulled back on corn but will be planting more soybeans — 400,000 acres more each in Illinois and Iowa and 100,000 more in Indiana.
On June 30, we’ll find out how much really got planted.