Minnesota farmers plan to plant a record amount of corn this year, while the overall U.S. corn crop is expected to be the biggest since 1936, say federal government forecasts released Thursday.
In Minnesota, most of the increase in corn, the state’s largest crop, comes at the expense of the second-biggest crop, soybeans. Indeed, Minnesota and Nebraska are expecting the largest declines in soybean acreage this year, according to the U.S. Department of Agriculture.
Minnesota farmers “are more confident in their [corn] production capabilities than any other crop,” said Ed Usset, a grain marketing specialist at the University of Minnesota. “Corn just seems to be more consistent.”
It doesn’t hurt, either, that Minnesota farmers on average had a strong corn crop last year, with many largely dodging 2012’s brutal U.S. drought. “I’m sure that does play into it,” said Bruce Peterson, a Northfield corn and soybean farmer and a director of the Minnesota Corn Growers Association.
In 2013, farmers are expected to plant 9 million acres of corn in Minnesota, exceeding last year’s previous record by 250,000 acres, or 3 percent, according to the USDA’s annual Prospective Plantings report.
As for soybeans, Minnesota farmers are forecast to plant 6.8 million acres, down more than 200,000 acres, or 4 percent, from last year. If realized, that would mark the state’s second-smallest soybean crop in 15 years. Growers of spring wheat, the state’s third-biggest crop, are looking at unchanged plantings — 1.35 million acres — from last year.
“It’s a combination of price and yield that overalls adds up to more profitability for corn, or at least it has in the last few years,” said Peterson, who may plant slightly more corn this year. He’ll farm about 75 percent corn and 25 percent soybeans. Minnesota farmers who plant corn often also plant soybeans, and vice versa.
Nationally, corn acreage is expected to be up slightly from last year, while soybean acreage is forecast to be down slightly, according to the USDA.
In a separate report Thursday, the USDA said that the nation’s corn stocks were down 10 percent from last year, but they were greater than analysts expected.
Corn prices reacted to the USDA reports by plunging the most since May, falling to the maximum allowed daily on the Chicago Board of Trade, Bloomberg News reported. Corn futures for May 2013 delivery fell 5.4 percent to $6.95 per bushel.
Expectations for a big corn crop are similar to what they were last spring. Indeed, corn prices were running around $5.50 a bushel a year ago on the prospect of expanding supplies. But they shot up to more than $8 a bushel by August as it became clear drought would singe the U.S. corn crop.
With some timely rains, Minnesota farmers managed to produce a record crop as measured in bushels, thus taking particular advantage of high corn prices. Since last fall, corn prices have remained relatively robust, hovering above $7 a bushel for much of the time.
But now, with downward pressures on corn prices, Minnesota farmers may face some critical decisions on selling grain they already have in storage, Usset said. With 2012’s big harvest, Minnesota is one of few states with more corn in farm storage bins on March 1 than a year earlier — 22 percent more, according to the USDA.
If a big corn crop materializes as forecast and corn stocks remain higher than expected, cash prices for grain in storage will fall, Usset said. “Minnesota farmers are playing a game of chicken,” he said.