The soaring cost of growing corn is causing farmers to rethink whether they'll plant more in 2009, according to a new survey by Farm Futures Magazine.
While a big crop should again be needed to meet strong demand, Farm Futures first survey of 2009 acreage indicates producers may not increase corn acres next spring, instead boosting ground planted to soybeans, which are cheaper to grow.
The Farm Futures survey puts 2009 corn acres at 87 million, unchanged from the latest USDA estimate of 2008 seedings.
"Anecdotal reports from farmers indicate they're very concerned about the financial risk of growing corn next year, due to rising production costs, says Farm Futures Senior Editor Bryce Knorr, who directs the research. "Our survey would seem to suggest that 2009 crop corn prices must rise to attract the acres needed to meet demand."
Farmers cut corn acreage in 2008, after record plantings in 2007, due to strong soybean prices. Soybeans again appear to be emerging as an attractive alternative in 2009, but it could be due more to costs.
"The ratio of new crop soybean to corn prices is much lower than it was last winter, suggesting cost, rather than prices is driving farmer decisions," says Farm Futures Market Analyst Arlan Suderman.
The survey shows another big shift towards soybeans, with initial intentions at 78.5 million acres, up from 74.8 million in 2008. Some of that ground could come from winter wheat, where seedings could be down this fall, especially in the eastern Midwest where soft red winter wheat is grown. Cash prices for soft red winter wheat have been persistently weak, despite historically high futures prices in Chicago. The Farm Futures survey showed winter wheat seedings at 45 million acres, down from 46.6 million in 2008.
Regional shifts also showed up in corn and soybeans. Growers in the heart of the Corn Belt -- Iowa, Illinois and Indiana – planned to increase corn plantings, while those on the edges of the region, in more high-risk areas, were more likely to shift to soybeans.
Farm Futures surveyed 701 growers by email from July 25 to Aug.5. The acreage estimates were released Tuesday at the Farm Progress Show.