March 17, 2015
Spring-like Weather Finally arrives in the Midwest
The first day of spring occurs on Friday, March 20th and finally the weather across the Midwest is starting to look more like spring. The survey for the USDA Prospective Planting Report from the USDA is currently underway and it will be released on March 31st. In the meantime, let's take an early look at the 2015 growing season in the United States.
For the last several months there have been a lot analysts with the opinion that there will be a huge increase in soybean acreage and a corresponding similar decrease in corn acreage. The main justification for the change was basically that soybeans are cheaper to plant and not as risky as corn. I think it's more complicated than just that and I did not agree that there will be a huge increase in soybean acreage.
I am anticipating that the 2015 U.S. soybean acreage might increase 1-2 million acres compared to the 83.7 million planted in 2014. For corn, I think the 2015 U.S. corn acreage might decline 1-1.5 million acres compared to the 90.6 million planted in 2014. Even though corn is more expensive to plant, it still offers a better return than soybeans (at least at the current prices). As far as potential yields are concerned, I would start off the growing season by estimating the 2015 U.S. corn yield at 166-167 bu/ac and the soybean yield at 45-46 bu/ac.
The state where probably the biggest switch in crops will occur is North Dakota where there could be as much as one million acres of corn switched to soybeans. Corn yields in North Dakota are relatively low compared to the rest of the country and farmers in the state receive lower prices for their corn due to the weak basis caused by transportation problems in the state. When corn prices were seven or eight dollars a bushel, corn production looked good in North Dakota. It doesn't look so good when prices are three to four dollars a bushel or even lower due to the weak basis.
If there is going to be a switch in crop acreage in the Midwest, it might be more in the fringe areas where the corn yields are generally lower. I think most farmers in the heart of the Midwest will stay with their long term rotations. As a result, by eliminating some of the lower yielding locations, that could help support the nationwide corn yield. Conversely, by having more soybeans grown in the fringe areas, it could hurt the nationwide soybean yield.
Midwest weather - I know it is early to be worried about weather and soil moisture, but I think the one area of concern that needs to be watched is the northwestern Corn Belt. The soil moisture in North Dakota, South Dakota, and Minnesota is relatively short after low snowfall this winter. Dry soils in the spring are good in the short term because it allows for early field work. The concern is that there may be moisture deficits in the summertime if the soil moisture is not recharged with spring rains.