March 26, 2008

Expert advises farmers to plant corn in fields not yet committed

"The March 31 Prospective Plantings report is going to suggest that producers will plant less corn and, in fact, that may be bullish to corn," said Chris Hurt, Purdue Extension agricultural economist.  "During the last three weeks, market prices for corn have actually increased the incentive to raise corn as soybean prices dropped more sharply."

Hurt predicts the report will be bullish to corn with surprisingly low acres, he expects to see a rally in response.

 "On the other hand, we will see so many acres in soybeans that it is probably bearish to bean prices, which will provide additional incentives to get more acres of corn in the ground," Hurt said.  "I think Indiana producers will look for a few additional fields where corn can be planted rather than soybeans.

"The markets and the financial incentives provided by the grain prices, as well as the costs are very dynamic.  Producers have some tough decisions to make this year, but they need to take a step back and make the best decisions they can."

Hurt recommends producers go a little heavier to corn than they were originally thinking through the winter.

"We are already starting to be concerned about delays on the planting season," Hurt said.  "There has been a lot of moisture recently, and we are looking at cool, moist conditions early into spring that could delay our corn planting.  If corn planting is delayed, that would naturally push us to plant more soybeans."

From the March 31 report, we expect to see soybean acreage up 10 percent across the country at approximately 70 million acres, he said.

Hurt's budgeting shows that Indiana farmers with average quality land saw a $20 to $40 premium to plant soybeans this winter.

"This means fewer corn acres," Hurt said.  "We expect corn acreage to be down 6 percent at about 88 million acres.

"Interestingly, the U.S. Department of Agriculture's survey was done around the first of March, which was when soybean prices were peaking and we saw the maximum for the year on March 4 with new-crop futures at $14.66 per bushel.  Since that time, soybean markets have gone down relatively more than what corn has, and we have seen a reversal in the new crop futures."

As a result of the increased corn prices we've already had, we're going to see some producers look a little bit more heavily to corn, he said.  However, Hurt said there can't be a major change because the seed and chemicals are ordered, and many decisions are made.

Farmers are faced with many issues this growing season, and we are so dependent on having a good crop in the United States this year, Hurt said.

"That good crop will start with how many acres can get into production of each of the commodities and, secondly, what can yields be given the weather conditions this summer," Hurt said.

For people interested in learning more about the report, there will be a free outlook meeting at 7 p.m. March 31 via IP-videoconference.

Host sites include Purdue Extension offices in Adams, Allen, Bartholomew, Clark, Dearborn, Decatur, Dubois, Grant, Hancock, Harrison, Hendricks, Marshall, Pulaski, Tipton and Vanderburgh counties.  The outlook meeting also will be available for viewing from the Purdue West Lafayette Campus in Krannert, Room 661, the Southwest District Extension office and the Newton County Government Center.

For questions and more information contact Hurt at (765) 494-4273 or hurtc@purdue.edu.

Writer: Julie Douglas, (765) 496-1050, douglajk@purdue.edu

Sources: Chris Hurt, (765) 494-4273, hurtc@purdue.edu

Ag Communications: (765) 494-2722;
Beth Forbes, forbes@purdue.edu
Agriculture News Page

Note to journalists:  This is a pre-report of what is expected to come out of the USDA Prospective Plantings report to be released March 31.

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