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January 22, 2002

ACREAGE PROSPECTS

The USDA's annual Crop Production report released on January 11 contained much smaller estimates for acreage of 2001 crops, especially for soybeans. Planted acreage of soybeans in 2001 totaled an estimated 74.105 million acres, about 1.1 million fewer acres than previously estimated. Acreage was 2.552 million less than reported in the USDA's March 2001 Prospective Plantings report and 161,000 less than planted in 2000. Acreage was below the previous year for the first time since 1990.

Planted acreage of corn in 2001 totaled only 75.752 million acres, about 200,000 less than previously reported and nearly 3.8 million less than planted in 2000. Planted acreage was 941,000 less than reported in the USDA's March 2001 Prospective Plantings report. The area planted to principal crops in 2001 was 3.4 million (1 percent) less than planted in 2000. Harvested acreage declined by 3.7 million (1.2 percent).

The harvested acreage of all crops, excluding hay, declined by nearly 7.4 million, or about 3 percent, in 2001. Most of the decline was accounted for by feed grains and wheat. Geographically, much of the decline in acreage of non-hay crops occurred in Minnesota, Montana, North Dakota, and South Dakota. That decline was partly related to adverse weather conditions.

For 2002, questions about acreage center around the magnitude of total crop land and the mix of crops. An increase in total acreage of non-hay crops should be expected, although a recovery to the level of 2000 will not likely occur. The USDA's Winter Wheat Seedings report released on January 11 indicated that 41.031 million acres were seeded to winter wheat in 2001, almost identical to the 41.078 million seeded in 2000. Acreage in Kansas declined from 9.8 to 9.4 million, while acreage in Texas increased from 5.6 to 6.4 million. Acreage in the eastern corn belt and southeastern states declined from about 7.2 to 6.7 million acres.

The mix of feed grain and soybean acreage in 2002 will likely depend on a number of factors. These include spring weather conditions, relative prices, and government programs. The lower costs for fuel and some fertilizers have probably already influenced some planting decisions for 2002. With favorable spring weather, the combined acreage of feed grains and soybeans should be 3.5 to 4.0 million acres larger in 2002 than in 2001. Lower input costs should favor some rebound in corn acreage. Higher prices currently being offered for the 2002 corn crop should also favor some increase in corn acreage. It is not known whether the new farm bill will change the relative CCC loan rates for wheat, feed grains, and soybeans or if such a change would involve the 2002 crop. Changes proposed to date would involve making feed grain and wheat loan rates more attractive relative to the soybean loan rates. In addition to loan rates, the magnitude and method of calculating eligibility for other payments might influence the planting decision as well.

The USDA will survey producers and release a Prospective Plantings report on March 28. Actual plantings can sometimes vary significantly from intentions, as was the case in 2001. In addition, the March intentions report occasionally does not seem to account for all the acreage that should be planted. However, that report provides a good benchmark for direction of change The total of all intentions in 2002 should exceed actual plantings in 2001. At this juncture it seems likely that there will be a significant increase in corn acreage in 2002, perhaps 3 to 3.5 million, and only a modest change in soybean acreage.

Beyond acreage, growing conditions and prospective yields of the 2002 crops will take center stage in early spring. Relatively low carryover stocks of all major commodities means that a poor growing season would send prices higher. The market will be eager to see if a seventh consecutive year with yields near trend value can be achieved. If yields are near trend, the 2002 corn crop will likely approach 10 billion bushels and the soybean crop would exceed 2.9 billion bushels. For obvious reasons, crop concerns are concentrated in May, June, and July, offering opportunities to price a portion of the crop.


Issued by Darrel Good
Extension Economist
University of Illinois

  

Department of Agricultural and Consumer Economics    College of Agricultural, Consumer and Environmental Sciences
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