Soybean Acreage Could Be On The Rise In Iowa In 2022
Every spring, farmers across the US need to decide how much land they will devote to each commodity. These decisions are what have a big impact on the crop prices for that season, sparking what is often referred to as the commodity acreage battle.
Currently, this acreage battle is still up in the air even as we get closer to spring planting. In a report from NAFB, Mike Zuzolo, the Founder and President of Global Commodity Analytics said several factors are making this a difficult decision for farmers.
“I think this is where the main reason for that as we don't have, number one, a clear indication of fertilizer prices. And complicating that is the lack of clarity when it comes to even the chemical prices, and not just prices in these sectors and these inputs, but availability,” said Zuzolo. “Number two is just the sheer importance of the February base price, and the extreme levels that the new-crop beans divided by new-crop corn, what we call the bean-corn-ratio, just hit a pre-report high at the end of last week of 2.45. That gets you up to levels, based on my analysis, where you are back to buying bean acres.”
With weak harvests in South America right now, soybean prices have been on the rise. Even farmers in top corn-growing states, such as Iowa, are considering switching to planting more soybeans this year.
“I talked to a client, and this guy was in Douglas County, Illinois, so top-end producer, top-end yields, really high land prices, so, a typical corn producer if you really want to dot the i's and cross the T's. He said between the uncertainty about fertilizer, because he puts down 28 post-emergence in early-summer, late-spring, but can't even get a bid on that, and he's seeing the soybean prices and what they're doing and said I'm turning towards more bean acres. So here we are, practically in the middle of February, in the middle of corn country, and we're still turning corn producers into more bean producers,” said Zuzolo.
And this would make sense in certain parts of the country due to changing weather conditions and concerns.
“The southern states that are in a drought that would plant corn or rice will probably move towards sorghum or soybeans. Hard Red Wheat producers that lose their crop this spring if we don't get rains will probably try and dust in soybeans,” said Zuzolo. “And then, there's the corn-on-corn producer in Illinois, in Indiana; those producers have told me pretty dramatically this past year that they're looking hard at beans because their corn-on-corn yield numbers were just not what they needed to be this past year, especially because of the tar spot. And so, the northern third of Indiana, the northern third of Illinois, I can sprinkle in more bean acres as opposed to corn if you're corn-on-corn acres.”
Zuzolo said that it is possible that the US could see corn acres below 90 million this year. With the price of soybeans at the highest it’s been in February since 2008, he said we could see soybeans above 92 million acres this year.
However, this does not expect this to be the case for small rains. Zuzolo anticipates farmers planting 16.2 million acres of small grains this year.
“That's your rice, sorghum, barley, oats, and that's the highest we've been since 2017-2018. And I'm also looking at higher cotton acres, although my Texas clients are telling me it's so dry right now they're not sure they're going to be able to get much cotton in at this point,” said Zuzolo