October 28, 2010

US corn sowings may peak at post-war high in 2011

US farmers could bring an area of farmland considerably bigger than Israel back into crop production next year to capitalise on higher food commodity prices, with corn sowings potentially set for a post-war high.

To rebuild corn stocks even to 1.2 billion bushels, a snug level by historical standards, over 2011-12 would require sowings of an extra 4.3 million acres, University of Illinois economist Darrell Good said.

The figure - implying plantings of some 92.5 million acres with corn, the highest figure since 1944 - assumed a corn yield of 160 bushels per acre, the trend figure on the university's calculations, and a small drop in feed use as livestock farmers pull back on ambitions to rebuild herds.

Expectations of continuing strength in US soy exports meant extra soy sowings might be needed too to keep silos filled, bringing the additional acres potentially needed between the two crops to 4-5 million acres.

However, Good added that "high prices of other crops suggest that there will be competition for acreage in 2011", meaning that extra sowings will have to come from expanding production area, rather than switching farm commodities.

Meanwhile, farmers may already have raised sowings of winter wheat, and in particular the soft red winter variety traded in Chicago, he said.

This estimate implies total sowings of major crops coming in potentially just short of 326m hectares, a figure which would be large with comparison to the past decade, but not by historical levels.

In the early 1930s, US farmers planted more than 370 million hectares to major crops, a figure drawn up under a less generous methodology.

The high in recent times, and under the current statistical format, was in 1984, when farmers planted more than 358 million acres.

Besides bringing marginal land back into production, sowings can be expanded through use of areas falling out of conversation programmes, or from ploughing up pasture.