The Strategist

US farmers traded corn for soybeans

02/22/2017 - 15:33

Corn is the main agricultural culture of the USA, yet farmers from North Dakota to Texas are preparing to sow soybeans in 2017.

Since 2016, soybean prices rose by 9.2%, while cost of sowing of oilseeds decreased. A farmer from Minnesota, with a farm of 2,500 acres (1,012 hectares), said that he is going to cover 55% of his land with corn in 2017, compared to 67% in 2016. In addition, he will expand territory for soybeans - from 33% in 2016 to 45% in this year.

A special planting technology helps US farmers produce a record amount of corn and soybeans per acre. This year, however, soybeans are in high demand, as they are often used for animal feed, production of vegetable oils and biofuels. Growing global consumption of meat, poultry, eggs and dairy products has doubled amount of soy used to feed animals since 2000. Much of this growth has been noted in China, the largest pork producer, where soybean imports have doubled in the past eight years.

Prices for soybeans in 2016 showed the first annual increase in four years. In 2017, US farmers will increase the volume of soybean planting by 5.8% to a record 88.27 million acres in order to boost profit. Volume of sown maize could fall by 3.6% to 90.77 million acres, which would be the biggest decline in three seasons.

Earlier this year, Farm Futures and AgriSource Inc. noted in a study that the United States will give more land for soybeans than for corn for the first time since 1983. Most of these areas will be seeded in May.

Type of crops varies by region and price. American farmers have reduced amount of acreage intended for winter wheat after a surplus of grain put the prices down to the lowest level in the last ten years, USDA data show. Southern regions prefer cotton rather than soybeans, after the cotton price rose to its highest level since 2014. Manufacturers increased sowing by 9.3% to 11.017 million acres, said the National Cotton Council of America.

Farmers are concerned that tough position of President Donald Trump in relation to commercial transactions could disrupt US corn exports to Mexico, said John Newton of American Farm Bureau Federation in Washington.

This year, profit from sale of soybeans will exceed the profit from maize by an average of $ 47 per acre, according to the University of Illinois. In addition, farmers will spend from $ 292 to $ 315 per acre to plant soybeans, up from $ 521 to $ 531 per acre for corn, said Gary Schnitkey from the University of Illinois.