How does USDA come up with 10 million more acres planted to crops this year?
A friend asked me how USDA can come up with these numbers. I will try and explain. Remember $7 corn and $13 soybeans and cotton at never before all time highs will get some big yards plowed up for crops this year.
Here is the math,
2.5 million from prevented planting / Last year prevented from planting acres were about 2.5 million over normal. So, if we have normal weather those acres should get planted.
1 million plus from CRP / CRP (Conservation Reserve Program) contracts are expiring this spring on about 4 million acres, of course some of those very same acres were re-bid into the program during the just concluded sign-up. But, some acres are coming out and did not get accepted or land owner did not put in a bid, and most all acres that are “new” to the program will not go into CRP until October 1. Plenty of time to produce a crop. My guess is a million plus or minus a few acres into production this year.
2 million extra double crop / More wheat growers will push the envelope on planting double crop soybeans and maybe some sorghum following winter wheat harvest this summer.
4.5 million out of pasture and hay ground / Lots of cows have gone to market in the last 12 months. Several ranches in places like South Dakota liquidated herds numbering 4000 head or more and all that grass is going to crops. You can make more money and it is a whole lot easier than raising cattle. Pastures in western Illinois are going to crops. We have a good friend who lost 2 pastures this year. Hay ground will go to crops, sell half the cows, bale for hay half the pastures and you plant more corn and soybeans. Lots of hay ground in western Illinois, southern Iowa, and northern Missouri last year was going to have one crop of hay taken off it and then planted to soybeans. Only problem was it started raining during the late spring, hay could not be baled and crops could not be planted. This will be done this year. East Texas ground in grass will grow 100 to 125 bushel corn this year if weather cooperates. Lots of acres there.
Problems with this?
Cotton is attracting more acres everyday from corn and soybeans. Cattle prices are rising and some will look to the future and keep the cows. Prices for breeding stock at the Iowa Beef Expo were very high. Failed wheat acres will be planted to something out west, prices are just too high. May lead to a few less double crop acres, but full season crops will yield more. May see an increase in irrigated acres as with higher prices a farmer can afford higher priced water. Prevented planting may though look very good this summer if we have a bad stretch of weather, because crop insurance guarantees will be high and if prices fall into summer prevent plant may look attractive if farmers cannot get the crop planted.
So my guess is USDA will get at least 10 million more acres of crops planted, or it will be until January 2012 at least until they admit they didn’t.