March 30 (Bloomberg) -- U.S. corn acreage this year will be the largest since 1937, and more than expected, as profit prospects improve and warm, dry weather encourages farmers to boost plantings, the government said. Soybean acres are forecast to fall while wheat seeding may climb.
About 95.864 million acres will be planted with corn, up 4.3 percent from 91.921 million last year and more than the 94.658 million expected by analysts, the U.S. Department of Agriculture said today in a report based on a farmer survey. Farm net income may total $91.7 billion this year, the second highest on record, the USDA said last month.
At current prices, farmers in some parts of the Midwest can make more than twice as much from an acre of corn as from soybeans, according to AgStar Financial in Rochester, Minnesota. In Illinois, the biggest corn-growing state after Iowa, farmers have already started seeding following recent record high temperatures, the USDA said earlier this week.
“With the early spring and relatively high prices, we’re going to get even more total crop area planted,” Richard Feltes, a vice president of research for R.J. O’Brien & Associates, said by telephone from Chicago. “If April and May continue the above-normal temperature pattern, and precipitation will largely be normal to below normal, that’s the perfect formula for rapid early planting and maxing out the total planted area.”
Farmers may sow 73.902 million acres in soybeans, down 1.4 percent from 74.976 million last year and less than the 75.429 million expected by analysts. Seeding of wheat, including spring and winter varieties, may total 55.908 million acres, up 2.8 percent from 54.409 million a year earlier and lower than analyst expectations of 57.551 million.
The USDA said in February that rising acreage may push U.S. corn production to a record, capping food inflation. Global food costs rose to an all-time high in February 2011, spurring unrest in northern Africa and the Middle East. Corn futures touched a six-month high at $6.7575 a bushel on March 19 on the Chicago Board of Trade. In June, the grain climbed to a record $7.9975 as U.S. stockpiles slid to a 16-year low.
At current prices, farmers in southern Minnesota can make about $130 per acre of corn, compared with about $60 per acre of soybeans, because corn crops yield more, said Tom Neher, a vice president at lender AgStar Financial. Soybean futures have surged 20 percent since the end of November, as adverse weather threatened South American crops. Four months ago, before the rally, farmers would have lost $60 per acre on the oilseed, Neher said.
“Soybeans have worked really hard to buy back more acres,” said Neher, who helps manage AgStar’s grain portfolio, worth $2.1 billion in loans and leases to farmers. “Soybeans are more in favor now than they were earlier, but there’s still a lot more profit to be made in corn.”
Farmers from Minnesota to Washington may plant 11.976 million acres in spring wheat, down from 12.394 million last year, the USDA said. Analysts expected 13.35 million acres of the grain, used to make bread and pizza dough. Durum wheat, used in pasta, may be planted on 2.223 million acres, up from 1.369 million last year, when floods swamped fields.
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