U.S. farmers will respond to high commodity prices by harvesting their largest soybean crop ever and a corn crop that could tie the record set in 2016, projected the USDA on Friday.
Delivered to a hungry world recovering from the pandemic, the 2021 corn and soybean crops would fetch some of the highest farm-gate prices in years.
At its annual Agricultural Outlook Forum, the USDA projected a corn crop of 15.15 billion bushels, matching the record of 15.148 billion bushels of 2016, and a soybean crop of 4.525 billion bushels, topping the record of 4.428 billion bushels in 2018. At a combined 182 million acres, this year’s plantings of corn and soybeans would be the highest total ever for the two most widely planted crops in the country.
“Current new-crop soybean futures prices relative to corn, supported by strong Chinese demand and the tightest stocks-to-use ratio since 2013/14, are expected to boost soybean plantings to 90.0 million acres, which would be up 6.9 million acres from a year ago,” said the USDA. “Higher corn prices are also expected to encourage planting, albeit at a lower acreage increase compared with soybeans, up 1 million acres to 92 million.”
With full-throttle demand for the crops at home and abroad, the record-large crops would be fully consumed by the time the 2022 crops are ready for harvest. Corn exports were projected at a record 2.65 billion bushels and soybeans at a near-record 2.2 billion bushels “Despite increasing global demand, U.S. market share is likely to decline on limited exportable supplies.” The soybean carryover of 145 million bushels would be less than a two-week supply. The corn carryover of 1.552 billion bushels would be a five-and-a-half week supply.
Season-average prices were projected at $4.20 a bushel for corn and $11.25 a bushel for soybeans. The corn price would be 10¢ lower than this marketing year and the second-highest in eight years. The soybean price would be the highest since 2012/13.
The USDA said 5.2 billion bushels of corn would be used in making ethanol, up 5% from this marketing year, based on expectation of larger gasoline consumption as the economy recovers from the pandemic. “We will continue to follow this closely,” said USDA economist Justin Choe.
USDA’s projections on huge corn and soybean crops hinged in part on the highest-ever corn yield of 179.5 bushels an acre and the second-highest soybean yield on record of 50.8 bushels an acre.
Wheat production was projected at 1.827 billion bushels, almost the same as in 2020, from plantings of 45 million acres, up 651,000 acres from last year. Wheat sowings are under pressure from higher expected returns from corn and soybeans in the northern Plains.
Cotton production was projected at 17.5 million bales, compared with 14.95 million bales last year, with higher yields and planted area stable. The rice crop of 202.9 million hundredweight would be 11% smaller than in 2020 due to proportionally smaller seedings.
Sorghum plantings were projected to increase to 7.2 million acres, a 1.3 million-acre increase from last year, producing a crop of 441 million bushels, compared with 373 million bushels in 2020. The United States is the world’s largest sorghum grower and China is the largest importer. “Sorghum prices have been skyrocketing… and most of them have been going to China directly,” said Choe. “Almost all of this increase (in production) will go directly to exports.” The season-average price for sorghum was projected at $4.70 a bushel, down 10¢ from the 2020 crop.