Over the last few weeks Doane has received more than 1,100 completed surveys from farmers providing information about their planting intentions for the 2014 crop year. The survey results are eye-opening and could portend some significant market impacts if they are indicative of what will be reported in USDA’s annual Prospective Plantings report that will be released at the end of March. The data show farmers planning some significant shifts in acreage compared to actual planted acreage a year ago.
The survey results show farmers planning a significant reduction in corn acreage this year. Actual corn acreage for 2013 came in at 95.4 million acres but farmers would have planted even more acres if it hadn’t been for the wet spring. Based on the results of the Doane survey we expect the USDA’s Prospective Plantings report to show 2014 corn acreage dropping to 90.9 million acres with significant reductions all across the Corn Belt. With new-crop corn futures around $4.80 per bushel when the surveys were being filled out and with fertilizer prices down about 20 percent year-over-year, the size of the acreage decline is surprising. The data suggest that farmers are shifting some land out of continuous corn and moving back to a corn-soybean rotation.
The Doane survey results show a big increase in intended soybean acreage for this upcoming season. Soybean acreage of 83.6 million acres is indicated by the Doane survey. This would be a record high by a wide margin. The survey results show significantly more soybean acreage in almost all of the Corn Belt states. New-crop soybean futures were a little above $11.80 per bushel when farmers were filling out the survey forms.
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The survey results indicate that farmers will boost cotton acreage a little more than indicated in the National Cotton Council survey taken in December. The NCC survey put 2014 acreage at 11.3 million acres, up about 9 percent. Based on the results of our survey we expect cotton acreage to be up 11 percent to 11.5 million acres. Cotton prices have stayed strong over the last couple of months and are still above year-ago levels in contrast to most other crops.
Spring and durum wheat acreages are forecast to post sizable gains in 2014. Wet weather kept farmers from planting quite a bit of land last spring so a rebound in acreage is likely unless there is a repeat of the bad weather. Spring wheat prices have stayed strong over the last several months and the good prices are encouraging producers to boost acreage. Under assumptions of more “normal” weather this spring and based on the results of our planting intentions survey, we expect spring wheat acreage to come in at 13.5 million acres, 16 percent above the 2013 level.
The Doane survey results indicate an even larger year-over-year increase in durum wheat acreage. Last year’s wet spring caused acreage to be well below average. The survey results show durum wheat acreage intentions up by more than 30 percent from year-ago levels. Durum wheat acreage will probably bounce back to 2 million acres or more, which is still well below the 5-year average.
USDA has already reported U.S. winter wheat acreage for 2014. The data indicated a 1.2 million-acre decline in winter wheat acreage for this year, with a sharp cutback in soft red winter acreage. While total hard red winter wheat acreage is up year-over-year, it is down in some major producing states like Kansas (-700,000 acres) and Oklahoma (-300,000 acres). The condition of the winter wheat crop in the central Plains states has worsened over the winter months.
The survey data show higher oat, sorghum and hay acreage for 2014. The increases in sorghum and hay acreage are a little surprising. Acreages for these crops were up in 2013 due in part to the fact that the 2013 winter wheat crop was very poor and some of the crop was cut for hay and some was destroyed and the land replanted to a different crop.
If USDA’s Prospective Plantings report shows the acreage changes indicated by our survey, they could cause significant changes in prices. The corn acreage figure would be bullish, while the estimates for spring wheat and soybeans would be bearish. The survey data show a rebound in total crop acreage, since several million acres were left idle last year due to the adverse weather. In addition, the size of the Conservation Reserve Program declined when contracts covering about 1.6 million acres expired.