Acreage shift expected for 2019, but how much?
By Michelle Rook
Farmers regionally and nationally are talking about planting more corn and less soybeans in 2019. This follows a year of disastrous soybean prices in 2018 due to the ongoing trade dispute with China and record soybean production in the United States, which led to record carryout of 955 million bushel.
Early projections have ranged from two million to seven million more acres of corn in 2019 and two million to four million less soybean acres. December estimates called for a 2.8 million acre increase in corn and four million acres less soybeans for next season. USDA’s baseline projections released in November pegged a drop in soybean acreage to 82.5 million acres, with corn acreage increasing to 92 million. Wheat seedings would also increase 6.6-percent from 2018 to 51 million acres.
DEKALB Asgrow agronomist Keith Mockler covers southeast South Dakota. He says as he talks to farmers planning for 2019 he hears a common theme that corn acres will be up compared to soybeans and he says that is the same trend playing out across the country.
“You know, I think nationally we could probably go up on corn four million to five million acres and that wouldn’t include a lot of corn on corn,” Mockler says.
He says farmers like to plant corn and with the current market prices that is signaling more corn as well. Mockler says generally the corn soybean price ratio has to be 2.5 to 1 or higher in favor of soybeans to spur farmers to plant more beans. “Today that ratio is more like 2.3 to 1 on new crop beans versus corn and that doesn’t generate enough revenue per acre for guys to plant beans. It’s a gross margin game,” he says.
The one caveat is Mother Nature. Randy Martinson with Martinson Ag in Fargo is doubtful there will be a huge swing into corn in the northwestern corn belt and states like North Dakota, due in part to the late harvest season. “Farmers were still harvesting corn and even soybeans into December and didn’t get much fall tillage done in those areas. If the soil conditions stay wet through spring farmers won’t be able to plant corn on or even spring wheat; they will be forced to plant beans.”
Mockler agrees that weather may be the trump card. “You know, we’re going to have some cooperative weather in the spring to get that much corn planted because you’re talking corn could touch 93 to 94 million acres in the U.S.”
As farmers look ahead to 2019, they’re also facing the prospect of higher input costs for herbicides and fertilizer, in part due to the ongoing China tariffs. Mockler says nitrogen has taken the biggest hike. It is also a function of supply and demand as not a lot of anhydrous was put on in the fall, so that’s pushing prices up for urea and liquid nitrogen products at the 28-percent and 32-percent level
“It’s substantially higher, especially on the nitrogen side. You know you’re looking at probably close to $70 per ton on urea higher than a year ago at this time,” he says. However, he thinks phosphorus and potassium prices could remain fairly steady through the winter.
Some herbicides that contain active ingredients manufactured in China have also gone up in price. Mockler says that is the case with products containing generic glyphosate or Roundup. However, he says branded herbicide products made in the United States by companies like Bayer Crop Science are more stable in price.
“In the whole scheme of things, it’s probably a couple of dollars an acre increase in an entire herbicide system,” Mockler says.
Overall, the uncertainty in the marketplace has more farmers than normal waiting to make their planting decisions for 2019. Mockler says it isn’t just the prospect of a move up in the soybean market if the U.S. and China strike a trade deal. In fact, he says the financial uncertainty has many farmers waiting to lock in their planting choices for next season.
“The guys that are sitting on the fence now, which is a lot of growers, are just trying to look at their cash flows and trying to figure out what’s going to work,” he adds