January 12, 2011

USDA predicts more crop acreage and soy in 2011

The USDA predicts that corn, soy, wheat, and cotton prices are at their highest levels in years which would imply more crop acreage in 2011, said Gerald Bange, chairman of the USDA's World Agricultural Outlook Board.

In a crops outlook report delivered at the American Farm Bureau Federation's 92nd annual meeting, Bange said as much as 10 million more acres could move into crop production this year.

"We won't know until we get the planting intentions report. It won't be until June for us to know for sure," Bange said.

Strong prices and strong demand for cotton should mean more acreage will be devoted to that crop, according to Bange, but it is still uncertain what kinds of increases are seen for corn and soy.

High prices and very low stocks for corn should mean more corn acreage in 2011, but Bange said indicators right now are actually pointing to more soy acres.

"As farmers look to the future, they may be looking to soy," Bange said.

"That intrigues us a little bit because I think everybody is of the opinion that corn would be the favoured crop as we move into 2011."

One factor driving greater prospects for soy may be high fertiliser costs associated with corn production as well as greater weather risks for corn production, according to Bange.