Increase expected in U.S. soybean acres
By Jennifer Carrico
A shift to more soybean acres being planted is expected for the 2014 planting season.
“While both corn and soybean commodity prices have slipped in recent months, there seems to be a bit more strength with soybeans, thus pushing farmers to produce more soybeans,” said Iowa State University Extension field agronomist Mark Licht.
“Additionally, the last two years have been pretty stressful on corn following corn acres. Both corn and soybean yields have suffered the last two years, but there was a greater corn yield penalty with corn following corn versus corn following soybean the last two years,” he said.
Exports continue to be a driving force for the soybean market, according to Iowa State University Extension agricultural economist Chad Hart.
“Globally strong production is met by strong global demand. For U.S. exports, the percentage growths aren’t quite as exciting, but the overall level of exports is,” Hart said. “We are on pace to set a record for soybean exports, possibly breaking through the 1.6 billion bushel barrier. Export sales growth has been broad based, but given the concentration in the market, it is still China that really moves the market.”
China’s soybean purchases are up 32 percent to 250 million bushels as compared to last year. China currently buys one of every four soybeans produced in the U.S., with 65 percent of the exports heading there. The U.S. is also increasing sales to the EU, Mexico, Japan and Indonesia. Hart said it is important to keep an eye on the South American harvest.
Licht agreed, “South American soybean production definitely has the ability to affect U.S. soybean production. Again it goes back to markets responding to supply and demand. High South American production will put more soybean supply out there, which can lead to lower market prices if demand doesn’t pick up the surplus.”
Hart said last year, the U.S. soybean export market topped out by April 1, and this year that market could plateau sooner.
“All in all, crop demand is off to a very good start this marketing year for both soybeans and corn. And that’s helped hold prices around break-even levels for corn and maintain some profit margins for soybeans,” Hart said.
For soybean prices, Hart expects a lower average of $11 per bushel for 2014 and $10.86 per bushel for 2015. These prices are obviously considerably lower than the 2013 levels.
Hart shows concern for the upcoming planting season, as the projected margins for the 2014 crops are still below breakeven.
“The recent rally has added roughly $15 per acres to soybeans and $20 per acres to corn. Based on these projections, soybeans still have a slight margin advantage over corn, but the gap has shrunk,” he said.
Hart said numbers indicate corn plantings still expected to be above 90 million acres and soybeans reaching 80 million acres, which would set the U.S. up for record corn and soybean crops.
Licht said another reason for farmers shifting from corn to soybeans is a continual problem with corn rootworm. “Corn rootworm resistance developments have been increasing for several years adding to reduced corn yields. By rotating to soybeans, corn rootworm can be managed because of a lack of suitable host. Even rotating to soybean every three or four years provides an effective management tool to be used in combination with rootworm traited corn and soil applied insecticides,” he said.
However, soybeans don’t come without health issues of their own. “Soybean Cyst Nematodes could definitely be problematic since they generally increase in number during dry years and I sense that farmers are getting a little more lax on selecting SCN resistant varieties,” Licht said.
Soybean aphids and sudden death syndrome could be problematic if air temperature and soil moisture conditions become suitable, but he said those problems are unpredictable. “Another challenge we may face is soil moisture availability. At this point in time we are drier than we’d like to be. It will take above normal rainfall in April, May and June to pull us through but that comes with the chances of higher erosion rates and nitrogen leaching,” he said.
Weather will certainly be the main factor in how everything turns out. Hart said the weather patterns that seem to be setting up for this spring and summer have some of the agricultural climatologists pointing to the potential for above-average yields.
“If I put those yields together with the most recent planting estimates, the U.S. would produce another 13.9 billion bushel corn crop and 3.6 billion bushel soybean crop. Corn would be roughly at record levels, but soybeans would blow by the previous record,” he said.
Jennifer Carrico can be reached by phone at 515-833-2120 or by email at email@example.com.