Record Soybean Acreage Forecast for 2014
Farmers will plant 7 million more acres to soybeans in 2014 than they did in 2013, private analytical firm Informa Economics forecasts. If realized, Informa’s estimate of 83.9 million soybean acres would be a record.
Using a “trend-type” yield of 44.5 bushels per acre, next year’s soybean production could swell to 3.7 billion bushels, Informa’s report stated.
Corn acreage is expected to fall 4.3 million acres next year to 91.7 ma as corn’s potential net revenue per acre falls below soybeans’ prospects. Informa estimates that U.S. growers will produce 13.7 bb of corn in 2014 using a “trend-type” yield of 163 bpa.
The early forecasts for row crops are based on an analysis of the economic prospects for each crop and assume normal spring planting conditions. Its wheat estimates, which put all-wheat acreage up 1.6 ma at 57.7 ma, are based on economic prospects as well as Informa’s survey of winter wheat planting intentions.
Informa said its survey indicated 42.8 ma will be planted to winter wheat, with hard red winter wheat acreage estimated at 29.6 ma and soft red winter wheat acreage at 9.8 ma. The firm estimates that winter wheat will yield 48 bpa and spring wheat will yield 43 bpa. All wheat production is pegged at 2.3 bb.
“Informa’s early estimate of planted acres in 2014 is reasonable and headed in the right direction, but it should be remembered that we are still a long way away from planting corn and soybeans in 2014,” DTN Analyst Todd Hultman said. He said the slight increase in wheat acres is in line with recent gains in wheat prices.
Compared to last year, the incentive to plant corn is much lower. Soybeans have the highest implied net revenue return, and Informa expects that most acres leaving corn will likely go into soybean production. Some acres may also switch to cotton. That calculation uses historical and expected prices, trend yields and USDA’s Economic Research Services variable cost of production estimates for 2014.
When planting economics are evaluated by looking at 2014 new-crop futures contracts, corn has a higher net return per acre, but its premium over soybeans is substantially lower than in recent years, dropping to $41 per acre compared to 2013′s $104 per acre premium and 2012′s $132 per acre premium.
The premium is more in line with 2008, 2009 and 2010, Informa said, adding that in each of those years, corn acreage dropped below 90 ma.
“Yes, soybean prices are currently more profitable for producers than corn, so we are likely to see a reduction in corn plantings in 2014 and more soybeans,” Hultman said.
“EPA’s decision on whether or not to reduce the 2014 corn-based ethanol mandate will be an important factor in next spring’s planting decision. If EPA does reduce the mandate to 13.0 billion gallons as the recently leaked document suggests, it may bring about an even larger move from corn to soybeans than Friday’s Informa report estimates,” Hultman said.
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