U.S. planting of eight major crops will decline 0.7 percent in 2014 to the fewest acres since 2010, and prices of corn, soybeans and wheat cotton will fall for the second straight year, the government said.
Farmers will sow 253.8 million acres of corn, soybeans, wheat, cotton, rice, barley, sorghum and oats, down from 253.8 million in 2013, Joe Glauber, the chief economist at the U.S. Department of Agriculture, said today in a presentation at the agency’s annual outlook conference in Arlington, Virginia. Global production growth will exceed demand, pushing prices lower, he said.
Planting of corn, the biggest crop, will drop 3.6 percent, and soybeans, the second-largest, will increase 3.9 percent while heading for the steepest price slump, according to the USDA forecasts. Cotton and rice acreage will climb, while so-called minor feed grains will decline. There is no shortage of land after more than 8.3 million acres were abandoned in 2013 because of flooding, said Roy Huckabay of the Linn Group.
“The USDA’s acreage forecast is too low, so these numbers will change,” Huckabay, an executive vice president at the Chicago-based company, said in a telephone interview. “Total plantings could be up another 2 million to 4 million acres with normal spring weather.”
Planting of corn, wheat, barley, sorghum and oats will drop 3.8 percent to 159.9 million acreas, according to the USDA. The combined area for soybeans and cotton will rise 4.7 percent to 91 million, and rice will increase 16 percent to 2.9 million acres, the most since 2010.
The average cash corn price may drop 13 percent to $3.90 in the marketing year that begins Sept. 1, while soybeans may tumble 24 percent to $9.65 a bushel. Wheat in the 12 months that begin June 1 will slump 22 percent to $5.30 a bushel, and cotton may fall 11 percent to 68 cents a pound in the marketing year that begins Aug. 1.
The lure of soybeans in areas outside of the Midwest increased after corn plummeted to a 40-month low of $4.0625 on Jan. 10 from a record $8.49 in August 2012 .
Corn futures in Chicago have tumbled 34 percent in the past 12 months, wheat dropped 18 percent and soybeans declined 8.2 percent.
Cotton futures in New York climbed 3.8 percent in the past 12 months, increasing the shift from corn in areas from Texas to North Carolina, Huckabay said.
The main corn-planting season in the Midwest is still two months away, and beneficial weather may encourage farmers to sow more than forecast because the grain offers bigger potential yield gains than soybeans, Peter Meyer, the senior director of agricultural commodities at the Pira Energy Group in New York, said in an e-mail.
Higher corn output can more than make up for lower prices, he said.
“Prices and other things will remain sensitive to production shortfalls,” the USDA’s Glauber said. “If there are problems with production, we could see shocks in prices.”
The U.S. is the world’s largest grower and exporter of corn and the biggest shipper of wheat.