Farm Economists This Week:
Wednesday’s release of the USDA’s Prospective Plantings report left many in the ag industry with a furrowed brow.
Each March, the USDA sends out surveys to 80,000 farmers with the hope to better understand their planting intentions for the upcoming growing season. And most years, the big reveal is preceded by lots of hype, speculation, and uncertainty.
And farm economists have historical trust issues with the USDA’s data.
Lagging data often leads to revised reports months down the road. Last year even saw the final corn acreage tally 6.2 million acres below the March estimate. Woof.
But analysts still placed their bets. Between high grain prices, amped-up Chinese demand, and a slow South American growing season, most industry experts pegged farmers to be seeding corn and soybeans ‘fencepost to fencepost.’
Let’s just say the markets were caught a little off guard…
The surveys showed:
- Corn acreage expectations at 91.1 million, when the trade was anticipating 93.1 million.
- Soybean planting prospects at 87.6 million acres, a far cry from the 90 million expected.
The aftermath: Corn and soy prices went bonkers, both reaching their upper limit in trading for the day.
So, what’s mysteriously missing? About 3 million acres, noted University of Missouri economist Ben Brown. With steady acreage expectations for cotton and wheat, he’s intrigued where that cropland has gone in the estimates.
Looking ahead: Warm temperatures could make for a favorable and fast kickoff to corn planting. Add in the bookoo bucks on the table with current grain price levels, and growers might take the bait, adding in more acres to cash in.