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| Hawkeye State corn set for largest shift in the country? |
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By DOUG SCHMITZ
Iowa Correspondent AMES, Iowa — Iowa soybeans increased by more than 1 million acres while corn made the largest shift in any state in the nation, the USDA said last month, which found that Iowa intended to reduce corn from 14.2 million to 13.2 million planted acres.
The USDA’s Prospective Planting report, released March 31, stated that U.S. corn growers intend to plant 86 million acres of corn this year, down 8 percent from 2007, when corn planting was the highest since 1944.
This year, the corn-versus-soybeans contest has intensified, especially with the report revealing an 18 percent increase in soybean acres nationwide. Iowa may follow the same trend, where estimated corn acres dropped 7 percent and soybean acres soared 15 percent.
As the nation’s leading corn and soybean producer, Iowa’s soybean acreage would increase 1.25 million acres in 2008, to 9.8 million, the report said, with those additional acres primarily coming with a more traditional corn-soybean rotation and weather being a major player.
“The balance of the additional soybean acres are from tillable pasture and expiring Conservation Reserve Program (CRP) contracts,” said Steve Johnson, an Iowa State University farm management field specialist based in Des Moines.
“Weather will likely be the biggest factor affecting Iowa farmers’ planting intentions.
“A shift to warmer, drier spring planting would likely increase the number of corn acres that get planted. However, rising input costs, especially that of commercial fertilizer, has increased since last fall and may limit the number of acres that may still be shifted to corn in 2008.”
Johnson said the Iowa soybean-to-corn price ratio has averaged 2.31 over the past 34 years, with the 2007 ratio declining to 1.95 to buy additional corn acres, and the 2008 ratio climbing above 2.31 “in order to buy soybean acres.
“Following the March 31st report, this ratio is below 1.9 in an attempt to buy more planted corn acres nationwide,” he said.
“Expect the report to trigger an increase in corn acres, especially on well-drained productive land that was tilled last fall.”
This average shift from corn to soybeans also exceeded most trade analysts’ expectations, Johnson added.
“This is an extremely large decline in the face of increasing demands for livestock feeding, exports and especially ethanol production,” he said. “If realized, expect extreme basis variability among corn merchandisers across the state. This would be especially true in areas threatened by production concerns during the growing season.”
Despite the higher-than-ever production, the USDA said the surge in corn prices, which began in early 2007, came anyway when corn started trading for more than $3 per bushel. The USDA added that if the values hold, the average yearly price per bushel in 2008 will be higher than ever before.
Dave Moody, president of the Iowa Pork Producers Assoc., said if corn prices stay high or increase, “in the long term, (pork) prices are definitely going to come up.”
A recent survey by Agrisource, a West Des Moines-based grain marketing and crop insurance company, said Iowa farmers are leading a national trend for more soybean acres in 2008. Agrisource conducted an acreage survey of its customers across the Midwest as well as farmers who attended the 53rd Iowa Power Farming Show, which was held Feb. 3-5 in Des Moines.
Participants surveyed were operating more than 2.2 million acres in Iowa, Illinois, Minnesota, Missouri and Nebraska.
Based on the results, Agrisource forecasted a 5 percent decrease in corn acres in Iowa and Illinois, which would dip corn acreage in Iowa to 13.5 million, compared with 14.2 million acres in 2007, with Illinois plummeting to 12.6 million acres from 13.2 million acres last year.
In addition, Iowa is expected to increase soybean acreage by 12 percent from 8.55 million to 9.6 million acres, the largest in the nation, according to the survey.
But Iowa’s grain elevators are feeling the effects of the higher prices, as well as the projected acreage increase. Frank Weiner, owner of Cartersville Elevator, a grain and fertilizer dealer in rural Mason City, is one of many Iowa dealers who have been receiving several phone calls from farmers seeking fertilizer, which has been in short supply.
Weiner said as corn prices move closer to the cost of soybeans, farmers might be trying to plant more corn on their swing acres.
This farm news was published in the April 16, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 4/16/2008 |
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