Monday, March 30, 2015

Farmers Look to Soybeans as Corn Prices Sink

Wall Street Journal:
U.S. farmers increasingly are eschewing “King Corn” in favor of planting soybeans, a dramatic shift that is shaking up futures markets and rippling through the broader agricultural economy.
Analysts predict farmers will plant record soybean acreage this spring for a second consecutive year while cutting corn plantings for the third in a row. The move comes as growers grapple with a roughly 50% decline in the price of corn, the nation’s largest crop by volume, since 2012.
The U.S. Department of Agriculture on Tuesday will forecast corn and soybean plantings in a key report based on farmer surveys. Analysts on average expect soybean acreage to rise 3% from last year to 85.9 million acres, while corn will fall 2% to 88.7 million acres, according to a survey by The Wall Street Journal.
Indiana farmer Del Unger and his son intend to plant nearly twice as many soybean acres this spring as last year while trimming corn seeding on the 6,500 acres they farm.
“Economics rule,” the 53-year-old Mr. Unger said. “With beans, we’ll break even or make a small profit, whereas corn will likely give us some red ink.” Mr. Unger said most growers can easily switch between planting the two crops.
In other words, expect bean prices to sink, and corn prices to stabilize.  Here on our farm, we just stick to our rotation, unless weather prevents corn planting.  That keeps things simple.

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