Wednesday, February 8, 2012

U.S. Corn Farmers to Plant Large Acreage Say Analysts

In a Reuters poll of 24 analysts, consensus is U.S. farmers will plant the largest amount of acres in corn in 68 years. Expectations are a faster than usual planting because of mild and drier weather will help raise the corn acreage planted.

Estimates are a total of 94.2 million acres will be planted, which could result in a record crop of 13.8 billion bushels produced, based upon a yield of 161.4 bushels an acre. The previous record is 13.1 billion bushels.

If the estimates are accurate, it'll be the largest amount of acreage planted in corn since 1944.

Some think the higher corn planting estimates are premature, citing farmers who haven't made a decision yet on whether to go with soybeans or corn. Corn is expected to be more profitable, but also has higher input costs.

Most believe higher corn prices are sustainable, which should drive up the earnings per acre by about $100 more than soybeans, matching performance over the last three years.

That assumption is based upon low supply and high demand. The drought in Argentina is also considered a major support for corn prices this year, and a reason for U.S. farmers boosting the number of acres planted.

The thought is if corn is above $6.50 a bushel, farmers will plant more acreage in 2012.

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