Most Ag economists are predicting planted soybean acres to decrease this year. It’s something we’ve all anticipated, because it’s just the reality right now. We have record levels of soybean stocks and an ongoing trade dispute with China. It’s what we know. What’s much more difficult to know is how much planted soybean acres will decline. Below, we provide a summary of the latest red-hot predictions from a variety of sources- Ag Economic Insights, Farm Market ID and the University of Illinois.
Prediction 1- Expect Acreage Shifts in Western Corn Belt
Megan Grebner of Brownfield Ag News spoke to David Widmar with Ag Economic Insights about his predictions for this season. Widmar says that Iowa, Illinois and Minnesota grow most of the nation’s soybeans. That’s probably not going to change. He does say, however, that a shift in acres will probably come from the Western Corn Belt. Up until this season, more and more soybean have been planted there.
“North Dakota has actually seen the largest change in soybean acres on an annual basis,” he says. “Almost half-a-million acres on average have changed. We also see Kansas at 350,000 acres and Missouri at almost 400,000 acres.”
Another clue about how much acres might shift will come from winter wheat and canola seedings.
“Wheat acres will give us an idea of how corn vs. soybean plantings will fare out in the Great Plains as they start to gear up for spring planting.”
Prediction 2- Soybean Markets Are Adjusting
Steve Rao posted an article on the Farm Market ID blog, sharing his planting predictions for 2019. He says the most important factor is using reliable data when making these decisions. Farm Market ID has a statistical model that can predict what any given grower will plant next year on a field level. They use ten years worth of cropping and rotation data as well as crop prices to make their predictions.
In 2018, soybean acres
Markets seem to be adjusting. For example, buyers that typically get their soybeans from Brazil are now buying large quantities of US soybeans. US soybean plantings will go down in 2019, but it won’t be as drastic as one might think. Below are Farm Market ID’s predictions:
- 8.6 percent increase in planted corn acres
- 9.3 percent decrease in planted soybean acres
- 2.6 percent decrease in planted cotton acres
- 40.3 percent increase in planted wheat acres
They emphasize that having aggregate data is helpful to understand current trends, but is only part of the whole picture when it comes to making planting decisions.
Prediction 3- Optimistic Scenario
Todd Hubbs of the University of Illinois published an article that contains a variety of different scenarios that is titled, “How Many Soybean Acres Do We Need in 2019?” He agrees that the number of planted soybean acres will decrease this year, but that current projections show that more soybean acres will be planted than necessary in order to reach breakeven prices in Illinois.
You can watch Hubbs’ predictions here.
Projections from industry analysts have soybean planted acreage ranging between 84.5 to 86.5 million acres. Hubbs is predicting planted soybean acres to be 85.7 million acres. Soybean use projections for 2019-20 are difficult to predict because of trade uncertainty with China.
The optimistic scenario projects soybean use next marketing year at 4.359 billion bushels on a resolution to the trade impasse and expanded exports during the marketing year.
At a 7.1 percent stock-to-use level, the optimistic scenario requires ending stocks for 2019-20 marketing year of 310 million bushels.
For this analysis, a soybean yield of 49.2 bushels per acre in 2019 is used for national average yield. At this yield, the optimistic use scenario requires 75.6 million harvested acres of soybeans to produce 3.7 billion bushels. Given this level of harvested acreage, planted acreage comes in at approximately 76.3 million acres.
Prediction 4- Pessimistic Scenario
Hubbs also provides a less optimistic scenario. Corn & Soybean Digest also published his article.
The scenario assumes consumption at 4.109 billion bushels on a continuation of trade disruptions and flat consumption growth.
The low consumption scenario requires ending stocks at 292 million bushels. By using a beginning stock level of 929 million bushels and 20 million bushels of imports, the optimistic and low consumption scenarios call for a U.S. soybean crop near 3.7 and 3.4 billion bushels respectively.
The low consumption scenario results in 70.2 million harvested acres to produce 3.4 billion bushels. Planted acreage comes to 70.9 million acres under this scenario. Under either scenario, planted acreage results in substantially lower acreage than currently expected by analysts. As one would expect, a higher yield assumption changes the analysis. For example, a trend yield of 50 bushels per acre provided in the USDA’s long-term projections lowers 2019 soybean planted acreage necessary, under the hypothetical consumption scenarios, to 75.1 and 69.8 million acres under the stocks-to-use ratio assumption.
Right now, it doesn’t seem very likely that soybean stocks from 2018-19 will be substantially reduced. We will need either a sharp increase in consumption or a sharp decrease in production to make a difference to get back to breakeven prices over the next production year.
Soybean acreage will likely be well above the levels necessary to to produce an average price in the mid-$9.00 range and meet the cost of production in Illinois.
All of our sources predict that planted soybean acres will decrease. We might expect some acres in the Western Corn Belt to change over to wheat. Todd Hubbs of the University of Illinois predicts that some growers in Illinois might plant more soybeans in order to meet the breakeven point.
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