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Analyst: This could be a big year for corn production
"If the weather is good this spring we could have huge acreages," says AgriVisor's Dale Durchholz.
Dan Grant
Published: Feb 3, 2012
Record-high corn prices in 2011 fueled by a historically-low stocks-to-use ratio likely has many farmers thinking one thing this year – plant more corn.
In fact, Dale Durchholz, AgriVisor senior market analyst, believes U.S. farmers this year could produce one of the largest corn crops in recent history and still possibly increase acres of other crops.
“If the weather is good this spring we could have huge acreages,” Durchholz told FarmWeek last week at an AgriVisor risk management workshop in Springfield. “And not just for corn but possibly wheat, soybeans, and even cotton.”
How will farmers boost plantings of various crops?
U.S. farmers last year planted 9.6 million fewer acres of all crops compared to 2008 due in large part to weather challenges. Meanwhile, since 2008 more than 3.5 million acres have been released from the Conservation Reserve Program.
“We have a huge storehouse of acres that can be planted this year,” Durchholz said.
And, even though crop prices have come down from last year’s highs, the market still is rewarding production this year, particularly for corn.
The University of Illinois recently projected operator and land returns this year on Central Illinois high productivity ground will average $578 per acre for corn-after-beans, $510 for corn-after-corn, $467 for continuous corn, $425 for beans after two years of corn, and $390 for beans-after-corn.
“Corn budgets have higher returns than soybean budgets,” U of I economists noted in a report at www.farmdocdaily.illinois.edu.
Durchholz also believes the crop insurance guarantee for corn this year could be the second or third-highest on record.
“Give me a good spring and (farmers) will plant early and they will plant a lot,” the analyst said.
Steve Turner, who farms in Cass and Morgan counties, said he currently plans to plant about 5 percent more corn this year.
He believes that, if the weather cooperates, U.S. farmers easily could plant 94 million acres of corn or more, as predicted by some private analysts. U.S. farmers last year planted 91.9 million acres of corn.
“From the guys I talk to, the question is how much over 94 million acres will we put in the ground,” Turner said.
Even if the planting season starts off wet, similar to the past two years, Turner believes farmers still could plant more corn due to their ability to plant more acres per day compared to recent history.
Turner recently added a second 12-row planter on his operation.
“People will hang in there for corn (if there are early planting delays),” he said. “We can plant corn so fast anymore.” If big acreages are realized it could ease supply concerns and be a drag on prices later this year.
“If we plant fast and get big acres it will set the stage for the trade thinking about big crops and potentially lower prices,” Durchholz said.
December corn prices could slip from around $6 per bushel to closer to $4.50 if that scenario plays out, according to the analyst.
“I think profit margins will be thinner this year,” Turner added.
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if is a good word to start with. if everyone started their sentence with if, they would never be wrong. much like last years prediction, not worth the time spent makeing it.
Posted by Anonymous on February 3 at 11:45 AM
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