Farmers expected to plant more acres with soybeans

Feb 27, 2009      Omaha World Herald

Farmers will plant more acres with soybeans this year as high fertilizer costs and record exports make the oilseed more attractive than some other crops, the Department of Agriculture said Thursday. A record 77 million acres will be sown with soybeans, up from 75.7 million in 2008, said Joe Glauber, the USDA's chief economist. Wheat will drop 8.1 percent to 58 million, he said, while corn will be little changed at 86 million.

"With consumer confidence weakened because of the worst recession since World War II, most aggregate measures are expected to be down sharply from record highs set last year," Glauber said. "Concerns with deflationary pressure remain, particularly if farm receipts remain down."

Soybean exports are expected to rise 6.5 percent to a record 1.225 billion bushels this year, according to the USDA, as drought in South America may make the world more dependent on U.S. oilseed.

The price farmers receive for soybeans will fall to $8 a bushel, from $9.25 for last year's crop, as pre-harvest inventories rise 81 percent to 380 million bushels by Aug. 31, 2010, Glauber said.

Corn production is expected to increase about 2 percent as exports fall and domestic demand rises, Glauber said. Consumption will increase because of a 14 percent jump in ethanol output that will counter declining feed use, he said.

Glauber said cash prices farmers will receive for this year's crop will average $3.60, down 30 cents from last year.

Wheat prices will average $5.15 a bushel, down $1.65 from last year, as large supplies outpace demand, Glauber said. A 15 percent drop in production won't dent supplies as exports fall 5 percent and domestic demand also declines, he said.

Return to full Washington Letter