A decline in corn planted in the U.S. this year could have far reaching effects – not only in the U.S., but globally. Analysts on average were predicting this year’s corn acreage at 87.387 million acres, down 6.2 million acres from 2007’s 93.6 million, which was the biggest corn area in over 60 years. Soybean plantings are estimated by analysts on average at 71.721 million acres, up from 63.6 million last year.
Indeed, with food prices racing higher around the world, and strong demand for corn from food companies, livestock producers and ethanol makers, U.S. corn production is considered a critical component of keeping people fed.
But as spring planting season draws near, now market analysts fear that many U.S. farmers will instead plant soybeans, which are commanding historic high prices at more than $13 a bushel (compared with $5.50 a bushel for corn) and are much cheaper to produce than corn.
Market experts say all signs point to a sharp decline in overall U.S. corn seeding this spring, which could spell a significant tightening of supplies that would resonate at home and abroad, impacting everyone from consumers to cattle feeders.
Because soybeans are typically planted later than corn, which goes into the ground in early to mid-April in many areas, those numbers could shift even further in favor of beans if current unfavorable wet and cool weather in the U.S. corn belt persists.
A shortfall in corn this year would follow last year’s short supplies of quality world wheat and soy crops, which caused prices to spike to record levels and contributed to rampant inflation in food prices domestically and abroad.
Fears are further compounded by the fact that farmers in Argentina, one of the world’s leading suppliers of soy, corn, wheat and beef, have gone on strike in a protest against new taxes, essentially shutting down the country’s grain export business.
“What does it mean for the consumer? More than likely higher prices yet to come,” Joe Victor vice president at Allendale said. “With higher grain costs, whether that grain is being fed for milk production, meat or egg production … it’s very likely we’re getting ourselves into a bind.”