US farmers expected to expand soy and corn acreage

PARIS: US farmers are expected to increase acreage of both soybeans and corn this year in response to high prices, Cynthia Nickerson, deputy chief economist at the US Department of Agriculture (USDA), said on Thursday.

In an initial projection in November, the USDA had forecast an increase in the soybean area and slightly lower corn acreage in 2021. It will update its forecasts next month.

"Since the price of both soy and corn are higher, the price signals are really to plant more of both, and that's what we expect to see - expansion of both into 2021," Nickerson told the Paris Grain Day conference.

Extra area this year was seen coming mainly from the return to cultivation of a high level of prevented plantings in 2020, she said.

Farmers reported some 10 million acres of prevented plantings last year, compared with 4-5 million typically, she said.

US growers can declare prevented plantings, usually due to weather conditions, as part of crop subsidy programmes.

The ratio between soybean and corn prices has also been broadly neutral in recent years, slightly favouring soybean planting but not suggesting a significant shift away from corn, Nickerson added.

Other analysts have pointed to higher US acreage of corn, soybeans and also wheat this year as growers react to multi-year price highs against a backdrop of rising Chinese demand and tightening US and global supplies.

However, longer-term prospects for expansion of US soybean plantings would be capped by limited land availability and crop rotation needs, Nickerson said, pointing to greater potential for area growth in South America.

Asked about the possibility for cultivation of some land in an 8.9 million hectare US conservation programme, she cautioned that such land tended to be less productive and was bound by 10-year rolling contracts.