April 3, 2006

USDA sees 5 percent drop in US corn planted area in 2006

The US Department of Agriculture predicted Friday (Mar 31) that US farmers will plant just 78 million acres of corn this year, a 5 percent drop from 2005 and 4 percent less than in 2004.

"If realized, this will be the lowest corn acreage since 2001 when 75.7 million acres were planted for all purposes," the USDA said in its annual Prospective Plantings report.

Analysts mostly expected a decrease in corn planting this year, but the 5 percent decrease is lower than was generally expected.

The average of estimates taken from analysts put US 2006 corn acreage at 80.576 million acres, down 1.18 million acres from 2005's seedings of 81.759 million.

Analysts said earlier this week they expected USDA to lower its expectation for corn planting this year because of energy prices faced by farmers and the crop's dependence on natural gas-based fertiliser. And that was the primary reason USDA gave Friday for the acreage decrease, although weather played a role too.

"Expected acreage is down from last year in most states as producers intend to switch to other less input intensive crops due to high fertiliser and fuel costs," the USDA said. "Dry conditions also contributed to lower planting intentions in the southern Great Plains."

Illinois, the USDA said, will see the largest loss in corn acreage this year. The report predicted 11.4 million acres planted this year, a 700,000-acre drop from less than in 2005.

Meanwhile, USDA reported Friday in its Grain Stocks report that corn stocks in all positions totalled about 6.99 billion bushels. That is a 3 percent increase from total stocks a year ago.