Acreage switch to soybeans not as drastic on Delmarva
By JONATHAN CRIBBS
(March 21, 2017) As Midwestern grain farmers move acreage to soybeans in increasing numbers due to sinking corn prices, a significant, regional corn basis should keep Delmarva farmers from following suit, farmers and agricultural experts said last week.
“There is definitely some of that happening,” said Lindsay Thompson, executive director of the Maryland Grain Producers Association. “But I wouldn’t say it’s widespread or significant outside of a grower’s normal decisions on crop rotation.”
Nationally, corn planting in 2017 is projected at 90 million acres, down 4 million from last year, according to recent USDA grains and oilseeds outlook report. Soybean acreage is expected to total 88 million acres, up 4.6 million from a year ago.
“Among the three major crops, for U.S. producers at present the relative fundamentals favor soybeans, particularly with expectations of continued growth in China’s soybean imports,” the report said. “In contrast, corn is face with only moderate growth in corn used for ethanol production and strong export competition from Argentina, Brazil and Ukraine. For wheat, continued large global supplies will maintain tough export competition.
“Given these respective fundamentals, soybean planted area is projected record high, in contrast to expected declines in corn and wheat.”
But Delmarva is a corn deficit region, and with the basis provided by a guaranteed market — the poultry industry — Delmarva farmers continue to get a higher price for corn. Some farmers are putting in more soybeans due to the significant premium offered by DuPont Pioneer to growers of their Plenish high-oleic soybeans, Thompson said.
“To my knowledge, we’re not going to see a large decrease in corn acres,” she said. “We could potentially see a decrease in wheat acres this year.”
Tyler Franklin, a grower in Essex County, Va., said he’s witnessed a small increase in soybean acreage though not dramatic.
Most of it due to the higher operating cost of corn, particularly on dryland acreage in Virginia, he said.
“People have burned through a lot of their assets in the last couple of years because prices have been down,” Franklin said.
And while soybean future prices in the Midwest is indicating a growing profit margin over corn, Eastern Shore commodities analyst John Hall said he thinks beans and corn could soon dip in price, disrupting projections.
“If that happens to be the case, I think the economics can change quickly,” he said. “I think we’re going to see the prices come down based on the current fundamentals of the supplies we have, which are burdensome.”