The 2022 crop mix is shaping up to be a wild ride as farmers try to adjust cultivation practices with soaring input prices and volatile crop prices, said Kevin McNew, chief economist at Farmers Business Network (FBN).
McNew spoke with Successful Farming on March 29, the day after FBN unveiled its 2022 Planting Report.
In the report, NBF predicts that 2022 acreage will total:
Corn: 91.1 million acres
Soybeans: 89.2 million acres
Sorghum: 7.0 million acres
Cotton: 12.4 million acres
Rice: 2.5 million acres
Winter wheat: 34.4 million acres
Spring wheat (non-durum): 11.2 million acres
Durum wheat: 1.8 million acres.
FBN’s estimate of 91.1 million acres of corn is lower than crop trade expectations of 92 million acres because the prices farmers can receive for planting competing crops are enticing, McNew said.
“It’s not just a corn/soy calculus that farmers are going through, even though it’s the case in Iowa and Illinois. But in the northern plains, for example, there is spring wheat. In the southern plains, there is cotton,” he explains.
Consider the cost of fertilizer, which is a huge budget item for farmers growing corn, and farmers in states where corn is less efficient at turning nitrogen fertilizer into corn will be tempted to look elsewhere. These include North Dakota, Colorado and Texas.
Corn and soybean outlook
McNew says the drop in corn acreage from 93.4 million acres in 2021 to 91.1 million acres in 2022 sends a bullish signal to farmers.
NBF expects North Dakota farmers to reduce corn acreage by 472,000 acres.
The top corn producing states that will lose acres are Iowa (-206,000), Illinois (-198,000), Nebraska (-178,000) and Indiana (-162,000).
FBN says the market signal for soybeans is neutral, with 89.2 million acres of soybeans expected to be planted in 2022, up from 87.2 million acres last year. North Dakota growers will plant nearly 798,000 more acres of beans in 2022; elsewhere, “I” states will also plant between 187,000 and 265,000 more acres this year.
McNew expects farmers to plant about 200,000 fewer acres of spring wheat in 2022; instead, they will choose to plant legumes, the value of which is quite high at the moment.
“We’ve seen farmers in North Dakota and Montana move away from spring wheat at a time when the global market is expecting a dramatic increase in spring wheat acres. We are a bit the opposite of what the market thinks,” he explains.
The sorghum acreage also surprised McNew. Farmers planted 7.3 million acres of sorghum in 2021, and the number is expected to remain around 7.0 million acres in 2022. While farmers in Texas will switch about 300,000 acres of sorghum to cotton, Nebraska, Oklahoma, Colorado and Kansas are expected to remain flat or increase. acres, likely due to dry conditions in those states, and lower production cost per acre of grain sorghum compared to corn.
McNew remains bullish on crop prices in 2022.
“Our view is that we don’t think there is a reason for the market to fall out of bed. We will have some pain days that will wipe out some premiums from the market, but there is no path to the bottom. corn at $4 and beans at $8 What we see in the March 31 USDA planting report will not derail this bull market.