Corn, soybean acreage estimates may drop
URBANA, Ill. (University of Illinois) – As the Midwest corn and soybean harvest accelerates, most of the production attention is focused on yield reports.
Still, according to a University of Illinois agricultural economist, last week’s report of planted acreage from the U.S. Department of Agriculture’s Farm Service Agency leaves some uncertainty about the magnitude of planted and harvested acreage of those crops.
“For corn, acreage that had been reported to Farm Service Agency as planted totaled 91.4 million, 2.65 million more than reported the previous month,” said Darrel Good. “Based on survey data, the USDA’s National Agricultural Statistics Service has estimated planted acreage at 97.37 million acres.
Acreage reported to FSA is expected to be less than the NASS estimate because not all producers are enrolled in programs that require reporting of planted acreage to the FSA.
Planted acreage reported to FSA as of the September report accounted for 93.9 percent of the total estimated by NASS and the difference was 5.951 million acres.
“Recent history suggests that the difference between the corn acreage reported to FSA and acreage estimated by NASS this year will be smaller when final estimates are available,” Good said. “If the final difference is equal to the largest difference of the past six years, the gap will narrow by 2.5 to 2.6 million acres.
“Planted acreage of corn reported to FSA increased from September to the final estimate by only 228,000 acres in 2011 and 213,000 in 2012. The increase may be larger this year due to the lateness of planting and the extension of the FSA deadline for reporting planted acreage.
It would be a surprise if the increase totaled 2.5 to 2.6 million acres, leading to the expectation that the NASS estimate of planted acreage may be reduced in future crop production reports,” Good said.
Lower corn carryover?
According to Good, the question is whether any reduction in the NASS estimate of corn-planted acreage, and acreage harvested for grain, could be large enough to alter prospects of a substantial increase in corn stocks by the end of the current marketing year.
“Historically, the final estimate of planted acreage has not differed from the June estimate by large amounts,” Good said. “The largest differences in the previous 10 years were in 2006 and 2008 when the final estimates were 1.3 percent and 1.5 percent less, respectively, than the June estimates.
“A similar decline this year would point to a 1.3 to 1.4 million-acre reduction in the estimate of planted acreage. Such a decline would require the FSA report of planted acreage to increase by about 1.2 million acres in order to narrow the gap between the two estimates into the historical range.
“Such an increase would be outside the recent experience, suggesting the NASS estimate could be reduced by as much as 2 million acres. With an average yield near 155 bushels, a 2 million-acre reduction in the estimate of harvested acreage would reduce the production estimate by 310 million bushels and result in year-ending stocks of about 1.545 billion bushels, based on current assumption yield forecasts.”
Tight soybean stocks
Good said that for soybeans, acreage that had been reported to FSA as planted totaled 74.6 million, 2.6 million acres more than reported the previous month.
Based on survey data, NASS has estimated planted acreage at 77.2 million acres. Planted acreage reported to FSA as of the September report accounted for 96.7 percent of the total estimated by NASS and the difference was 2.5 million acres.
Over the previous six years, the final total soybean acreage reported to FSA averaged 98.2 percent of the final NASS estimate of planted acreage. The difference between the FSA and NASS acreage estimates averaged 1.3 million acres.
“History suggests that the current gap between FSA and NASS acreage numbers will narrow by about 1 million acres,” Good said.
Planted acreage of soybeans reported to FSA increased from September to the final estimate by only 190,000 acres in 2011 and 161,000 in 2012, suggesting that the NASS estimate this year could be reduced by as much as 800,000 acres, Good said.
“That is not a large decline and is well within the experience of the past 10 years,” he said. “With an average yield of 41.2 bushels, an 800,000-acre reduction in the estimate of harvested acreage would reduce the soybean production estimate by 33 million bushels and result in year-ending stocks of about 120 million bushels, based on current consumption yield forecasts.”
Depending on average yield, the potential change in the estimate of harvested acreage of corn is not likely to be large enough to alter prospects of surplus supplies, but could be large enough to stabilize corn prices, according to Good.
“Any change in the estimate of harvested acreage of soybeans is not expected to be large, but could confirm prospects for another year of very tight stocks that would support prices at or above the current level.”
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