Alan Kemper, president of the American Soybean Association, was speaking because he had some unplanned idle time on his farm near Linden, Ind. “I’m sitting on a corn planter with a flat tire. We had about eight hours this week to plant corn so we put some more in, but we’re super way behind,” Kemper said.
The president of a soybean trade association planting corn? Of course, Kemper said. No farmer grows just one crop, and earlier this year, market conditions indicated that growing more corn would be more profitable. Now things are far less certain.
TV news footage of thousands of acres of farmland under water along the Mississippi River gets everybody’s attention, but floods are just one of a number of weather setbacks farmers have faced this year. Officials at the U.S. Department of Agriculture already are beginning to compare the flood of 2011 with the great flood of 1927, the worst in history.
“The flooding is symptomatic of a lot of rain, and a lot of rain has delayed planting,” said Eric Erickson, special assistant for planning, evaluation and projects at the U.S. Grain Council. Corn prices are high, he said, because producers have had to wait for fields to dry before they can begin planting.
“They’re planting with significant technology, and around-the-clock. They’re working hard to get it in,” Erickson said. “We need a bumper crop this year.” The world demands it; there’s domestic demand for corn to feed livestock and for ethanol fuel.
At the same time, Erickson said coarse grain production — corn, barley and sorghum — has been down just about everywhere: in the Black Sea region of Ukraine and Russia, and China is drawing down its stocks. The United States in 2010 had its third-best corn crop ever, producing 12.4 billion bushels, but the harvest was lower than expected and down 5 percent from 2009’s record 13.1 billion bushel crop, according to the U.S. Department of Agriculture.
Exports of $11 billion also were the third-best on record, trailing only the $14.6 billion of 2008 and 2007’s $11.2 billion, according to the Census Bureau’s Foreign Trade Division.
Soybean production of 3.33 billion bushels last year fell just short of the 2009 record of 3.36 billion, according to the USDA, but exports reached a record $19 billion, up 12 percent from a year earlier. In its May Supply and Demand report, issued last week, the USDA said it expects record corn production of 13.5 billion bushels this year, but soybean output is expected to slip to 3.28 billion bushels.
“We have a fairly low global coarse grains stock situation, with unrelenting growth in demand,” Erickson said. “U.S. producers want a big crop this year so they can sustain their supplies around the world. I think they recognize that this is a demand-driven market, and they want to produce for that market.”
If plantings are delayed and the harvest slips, however, U.S. agriculture exporters — and those who move it — will feel some of the impact. The fallout, for example, could slow rail freight traffic that has grown like a juggernaut since early 2010. U.S. carloads in April slipped 0.2 percent in April, the first year-over-year monthly decline since February 2010, but that was largely the result of slumping coal shipments. Grain shipments for the month were up 13.6 percent.
Conversely, if the flood impact is short term and domestic and overseas demand maintains its strength, plantings — and shipments — will catch up.
“The Midwest is hurting. I don’t know if we’ll make average yield in the U.S. this year,” Kemper said. “Minnesota to Mississippi is wet. That’s where corn and soybeans are planted. I don’t know if Iowa and Nebraska will have enough above the average to pull us up.”
Midwest producers are at the corn-soybean tipping point. Corn is the preferred crop, because it yields more per acre, but time is running out, Kemper said.
“In most of Indiana and Illinois, you can plant corn until Memorial Day, but after that you really start dropping yield,” he said. “Anything that’s wet after Memorial Day will get switched over to soybeans.”
Farmers in Kemper’s area are usually further ahead in planting than peers in other regions, but this year only about 6 percent of the corn is planted. “Normally, we’re done by the third week in April,” Kemper said.
Producers will earn more per acre from corn, even though soybeans pay more per bushel, said Phil Burke, director of marketing and industry relations for the U.S. Soybean Export Council, a different trade group from Kemper’s.
“Everybody was predicting that farmers were going to plant more corn and less soybeans this year because you get higher yields per acre,” Burke said. “Farmers, if they have a choice, will always want to plant corn more than soybeans. We would have had a slightly smaller crop of soybeans this year than last.”
Burke said the global soybean supply has had its ups and downs in the past few years. Argentina’s crop failed two years ago, which put pressure on the remaining supply. Things are a little more stable now.
“We’re just now getting back to where we have a stable global supply of soybeans,” Burke said. “Because of the wet and cold weather across the Corn Belt, we’re seeing a situation where we don’t know yet.” If farmers can’t get their corn planted in the next two or three weeks, they will shift more acres to soybeans.
“That’s going to increase the global supply of soybeans, which would probably be a drag on U.S. prices,” Burke said. “Now we’re in a waiting game to see how things pan out.”
Contact R.G. Edmonson at email@example.com.