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Farmers cautious about 2013 corn acreage, says survey

U.S. farmers are unsure about whether to increase corn acreage next spring, despite high prices and sharply lower production caused by this year's historic drought. Instead, Farm Futures magazine's first survey of 2013 planting intentions shows growers would rather boost soybean and wheat seedings.

Results of the survey of some 1,800 growers were released on the opening day of the Farm Progress Show held Aug. 28, 29 and 30 in Boone, Iowa.

Corn and Soybean Acres Shift

Farmers plan to put in 93.1 million acres of corn in the year ahead, down 4% from this year, when they planted the most corn ground in 75 years. Farm Futures' survey found producers actually planted slightly more corn in 2012 than reported in June by USDA, though they abandoned more of that ground than the agency estimates due to the ravages of the drought.

Instead of increasing corn plantings, as most experts assume, farmers want to continue expanding soybean acreage in the year ahead. Growers said they want to seed 78.1 million soybean acres next spring, up 1.2% from this year's total. Farm Futures also found higher soybean acreage this year, though greater abandonment, too.

"Ironically, this shift from corn to soybeans mirrors a similar shift taking place in South America as well, casting doubts on the world's ability to rebuild tight global feed grain stocks without a significant shift in global weather patterns to boost yields in 2013," notes Farm Futures Market Analyst Arlan Suderman.

Wheat Selectively Higher

Wheat acreage would also rise in the year ahead, according to the Farm Futures survey, reaching 57 million, up 1.8%. However, that increase would not be uniform across the country.

Instead, farmers in the eastern Midwest and South want to increase seedings of soft red winter wheat, while those in the Pacific Northwest are planning more white wheat. But both hard red spring and winter wheat seedings could decrease for the crop harvested in 2013.

Initial Implications

"Of course, these findings are just the opening salvo in the battle to buy acres in the year ahead," says Farm Futures Senior Editor Bryce Knorr, who conducted the research. "Farmer intentions can and do change, as they look at the profitability of different crops. But these results tell us that growers would like to get their rotations back in balance after pushing corn in recent years.

"Initial budgets for corn give it a strong advantage over soybeans, according to our projections. While farmers fear rising costs, especially for fertilizer, so far expenses don't look like they're increasing much. And 2013 crop corn prices are relatively stronger than those for soybeans, because the market assumes a big South American crop will hit the pipeline this coming spring."

Soybean-Wheat Competition

Wheat acreage could rise because profits for that crop are very competitive with soybeans, Knorr says. "Growers were pleasantly surprised by returns from wheat, due to strong price guarantees locked into Revenue Protection crop insurance. That coverage looks good again for the coming year, with wheat in its discovery period for the program when base prices are set."

"However, growers on the northern Plains continue to switch ground to corn and soybeans, holding down spring wheat acreage there. And farmers on the central and southern Plains may be reluctant to seed hard red winter wheat due to the lingering effects of the drought."

Suderman will present his outlook for the coming year daily at the show beginning at 9 a.m. in the Seminar Tent adjacent to the Farm Progress/Wallaces Farmer Hospitality tent. Knorr follows at 1:30 p.m. with a presentation on managing crop profit margins for 2013.

Farm Futures surveyed growers by email invitation from July 21 to Aug.

Survey results by crop:

2013 Crop Planting Intentions Projected Acres

vs. 2012 USDA Acres

Crop Acreage Change

Corn 93.06 million 96.0%

Soybeans 78.05 million 101.2%

Soft Red Winter Wheat 9.6 million 115.1%

Hard Red Winter Wheat 29.8 million 99.4%

White Winter Wheat 3.7 million 106.5%

All Winter Wheat 43.1 million 103.1%

Spring Wheat 11.8 million 98.2%

Durum 2.2 million 98.2%

All Wheat 57.05 million 101.8%

Farm Futures Survey:

- 2012 corn acreage was 96.7 million planted/83.9 million harvested

- 2012 soybean acreage was 77.1 million planted/74.7 million harvested