Farmers to plant more corn, less cotton and soybeans
by March 30, 2012 12:27 pm 79 views
Commodity traders and large buyers like Tyson Foods Inc. anxiously awaited the annual pre-planting report released Friday (Mar. 30) by the U.S. Department of Agriculture.
Acreage devoted to corn will increase 4% from a year ago, while farmers trimmed about 1% of their soybean acreage across the country.
Corn and soybean meal are the two major feed ingredients used by the U.S. poultry industry and meat industries. Feed represents more than 50% of the total cost raising a broiler from hatchery to slaughter. As grain prices remain elevated, meat companies are routinely posting red ink.
Analysts don’t expect any real relief in grain prices in the near term.
Overall, farmers indicated they intend to plant 95.864 million acres of corn in 2012, that is the highest planted acreage in the U.S.since 1937, when an estimated 97.2 million acres were planted, according to the USDA.
Analysts say the higher acreage really doesn’t mean a lot given the major uptick in demand from countries like China and the U.S. corn-based ethanol industry.
Record corn acreage is expected in Idaho, Iowa, Minnesota, North Dakota and South Dakota, while planting forecasts a decrease in the central and southern Great Plains which experienced severe drought and above normal temperatures throughout 2011.
Analysts say it’s many months until harvest and there is no way to know how much of the planted corn will find its way to market, which will likely keep prices moving higher.
Arkansas farmers say they will plant 18% more corn this year — devoting 660,000 acres versus last year’s 560,000 acres. Soybean growers across the Natural State intend to plant 3.3 million acres in 2012, down slightly from last year.
In early trading Friday (March 30) corn and soybeans both traded higher in Chicago. Corn continues to draw the most attention, trading well above $6 a bushel mark with historically low stockpiles.
Cash corn prices traded at $6.40 per bushel Friday, up 40 cents following the report. Soybeans rose to $14.08, 53 cents higher than the precious day.
Arkansas Annual Prospective Planting (acreage)
Corn 560,000, up 17.8%
Cotton 590,000, down 13.2%
Hay 1,450,000, up 3.5%
Oats 10,000 down 33%
Rice 1,161,000, down 29.2%
Sorghum 160,000, up 60%
Soybeans 3,300,000, down 0.9%
Wheat 540,000, down 12.9%