As trade disputes between the U.S. and China persist, U.S. farmers are reluctant to plant more soybeans in 2019. According to the USDA’s 2019 Economic Outlook, corn will steal acreage away from soybeans to reclaim the top spot in 2019. Soybean acreage exceeded corn acreage in the United States for the first time since 1983 in 2018, but tariffs placed on soybeans by China have impeded sales of the U.S. bumper crop, resulting in record carryover stocks of roughly 910 million bushels. Meanwhile, China has been able to weather the loss of U.S. supply by scraping together South America’s dwindling soybean stocks. Estimates peg the loss in crop receipts to U.S. soybean producers at $7.9 billion compared to the same period last year.
Corn acreage is set to increase 3.3 percent to 92 million acres and soybean acreage is set to fall 4.7 percent to 85 million acres in 2019 as farmers shift their planting intentions back to corn at the expense of soybeans. The USDA estimates increases in the prices of both commodities, however, with corn up 1.4 percent to $3.65/bu and soybeans up 2.3 percent to $8.80/bu. As far as other major crops are concerned, cotton acreage is set to reach a five-year high, despite a 6.9 percent price drop, whereas wheat acreage is predicted to hit a five-year low. The four-crop total acreage for major commodities (corn, soybeans, wheat, and cotton) is expected to shrink by a small degree, down 800,000 acres.
Lingering questions surrounding policy, trade, weather, and market information leave much uncertainty about this year’s crop. At the Agricultural Outlook Forum this week, USDA Chief Economist Robert Johansson remarked that the 2019 crop outlook is “less certain than perhaps any time since the first year of Freedom to Farm in 1996”. Any notable progress in trade negotiations could influence relative pricing and alter last minute planting decisions. Over the long term, real commodity prices are expected to continue to fall over the next decade as production continues to outpace demand.
As producers finalize planting decisions over the next few weeks, users can access Gro’s free web application to track changes in planting intentions and planted acreage for major crops in the United States.