Farmers’plans: More corn, soybeans, and cotton and less wheat in 2010

Written by Jonathan Eisenthal

American farmers plan to increase acreage of corn, soybeans and cotton, but this appears to bring no new acreage into production because it corresponds with a decrease in anticipated wheat plantings this year, according to the much anticipated government survey, the USDA Prospective Plantings report.

“Corn growers intend to plant 88.8 million acres of corn for all purposes in 2010, up 3 percent from both last year and 2008,” according to the prospective plantings report, issued Wednesday. “Expected acreage is up in many States due to reduced winter wheat acreage and expectations of improved net returns.”

A key element to the farmers’ choice is moderating fertilizer prices, according to many sources.

If farmers follow through with current plans, they will increase cotton by 1.355 million acres and soybeans by about 600,000 acres—78.098 million acres would be an all-time record for planted soybean acres in the U.S.

Even though corn acreage would increase nationally by 2.3 million acres if farmers follow their current plans, these intentions still fall far short of the modern record for corn planting set in 2007, of 93,527,000 acres—4.72 million acres more than corn farmers intend to plant this year.

In fact, the all-time record corn planting in the United States took place in 1932 when farmers planted 113 million acres of corn. That planting resulted in 2.5 billion bushels of corn. By contrast, this year’s intended planting of 88.8 million acres of corn could result, in a conservative estimate, in more than 13 billion bushels of corn—more than five times the yield farmers accomplished 80 years ago and using 24 million fewer acres than they did.

The state-by-state breakdown included in the prospective plantings report shows that corn acreage increases will not be uniform. Based on Minnesota farmers surveyed, USDA projects corn acreage of 7.6 million acres here, which would be the same amount as last year.

“Acreage increases of 300,000 or more are expected in Illinois, Kansas, Missouri, and Ohio,” according to the USDA. “The largest decreases are expected in Iowa, down 200,000 acres, and Texas, down 150,000 acres.”

The USDA summarizes soybean plans: “Soybean producers intend to plant 78.1 million acres in 2010, up less than 1 percent from last year. If realized, the United States planted area will be the largest on record. Acreage increases of 100,000 or more are expected in Illinois, Iowa, Kansas, Nebraska, North Dakota, and South Dakota. The largest decreases are expected in Georgia and North Carolina, both 150,000 acres less than 2009. If intentions are realized, the planted acreage in Kansas, North Dakota, and Pennsylvania will be the largest on record.

This report challenges a key tenet of the Indirect Land Use Change (ILUC) hypothesis. Proponents of ILUC bash ethanol for stealing soybean acres, which are then replaced ultimately by the clearing of forest and savannah in developing countries, they claim. This year’s plans demonstrate the true economy of America’s major crop producers—responding to market signals, they increase or reduce plantings, taking increases in one crop from decreases in another. American farmers are not farming more, they are farming smarter.

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