Will soy take precedence over corn? Experts say no

Although corn acreage has declined this year, high input costs appear to be to blame.

In July, the USDA’s National Agricultural Statistics Service (NASS) followed up on the USDA’s Prospective Planting Report released in March to survey fields after planting has ended and summer has begun.

One of the findings this year was different from normal for the United States – after surveying about 9,100 land segments and 64,000 farm operators in June, NASS estimated that 89.9 million acres of corn had been planted in the United States while 88.3 million acres of soybeans were planted. In percentage terms, that means there was 4% less corn planted in 2022 than in 2021, and 1% more soybean acres this year.

While corn has always been the king of the crop in the United States, from reports, it looked like growers were starting to favor soybeans more in the fields. But, one of the caveats with estimates is not seeing the reasoning behind decisions on the ground.

So why has there been a drop in corn this year? Experts believe this was due to corn input costs and inflation throughout the year.

“What drove this shift in corn and soybean acreage here in Indiana was almost exclusively economic,” says Bob Nielsen, Purdue University Extension corn scientist and professor of agronomy, noting that grain prices — although than exceptional for corn and soybeans – were slightly higher. in favor of soybeans this year.

“More importantly, there was an increase in input costs for corn versus soy before the start of the season,” adds Nielsen. “That’s led a lot of people to put more acres into soybeans and less into corn in response to those high inputs.”

According to the Agricultural Marketing Service, fertilizer prices as of July 14 were $1,469 per ton for anhydrous ammonia, $983 per ton for diammonium phosphate (DAP) and $862 per ton for potash. Additionally, according to the University of Illinois Nitrogen Fertilizer Outlook for 2023, the report indicates that all of these prices increased from the previous year – anhydrous ammonia prices rose from $726 per ton on July 15, 2021, an increase of $743 per ton. DAP rose from $688 per ton, an increase of $295 per ton. Potash rose $481 a tonne, an increase of $381.

“Nitrogen is about twice as high as the previous year, herbicide and seed costs are up,” Nielsen says. “Because corn requires a bit more input, especially on the fertility side, than soybeans, that leads many pre-season farmers to go ahead and make that switch.”

Was it a smart decision? Well, it depends on how much rainfall you have, as prices continued to stay at higher levels.

“The corn economy at this point probably looks a little better than it did before the season,” Nielsen says, noting that it’s always a gamble to time the game ahead in terms of the economy. “You roll the dice before the season thinking you know how to play the game, and in some cases too many people roll the dice to switch to soybeans, and suddenly the corn looks a little better.”

It’s important to keep other regions and their corn seasons in mind as well, especially in South America. The latest from Nielsen, Argentina was facing particularly dry planting conditions and wondered whether or not it would get the first crop.

“Argentina has a two-way strategy for growing maize – either they grow a normal season maize, which is planting now, or they have increasingly opted for a very late crop of maize which is planted, let’s say more like December or early January as a way to manage their risk of mid-season dry conditions,” he says. “That’s what’s happening now because it’s so dry – there may still be more corn put into this second category of delay, making markets uncomfortable when they hear about people delaying corn planting. It’s kept the corn market pretty good here in the US as we go into harvest. »

However, it still depends on the yield performance in the United States as the harvest continues. Regardless of the decision, Nielsen is sure of one thing.

“Corn will remain king in the United States,” he says.

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