Mississippi State, Mississippi
April 4, 2008
Mississippi’s soybean growers are
not alone in their enthusiasm for planting a large crop this
year, and the market knows it.
Soybean growers are expected to plant more than 2 million acres
in soybeans, the largest state soybean crop since 1998. The
national crop, once expected to be near 71 million acres, is now
forecast closer to 75 million acres.
“Two big reasons for the interest in soybeans have been strong
market prices and the cost of fertilizer,” said John Anderson,
agricultural economist with
Mississippi State University’s Extension Service. “Prices
have been as high as $14.50 per bushel, but mostly in the $12
range.
With fertilizer costs so incredibly high, producers prefer
soybeans, a crop that will not require as much fertilizer.”
The U.S. Department of Agriculture released its annual
prospective plantings report March 31, and it revealed
significant changes in national expectations for soybeans and
corn. An increase in the soybean predictions had an immediate
negative impact on their prices. For corn, the slight reduction
in acreage expectations produced a boost in those prices.
“Soybean prices dropped 70 cents per bushel the day of the
report but rebounded a little by the end of the first week,”
Anderson said.
The report suggested Mississippi growers will plant 2.05 million
acres of soybeans, or 41 percent more than last year. Reductions
in acreage from 2007 are forecast in the other main agronomic
crops. Growers are predicted to plant 670,000 acres of corn,
down 30 percent; 420,000 acres of cotton, down 37 percent; and
180,000 acres of rice, a loss of 5 percent.
“Futures prices on corn at the Chicago Board of Trade rose
fairly sharply following the release of this report,” Anderson
said. “This reflects the market’s perception that corn plantings
as projected in the report will not result in supplies
sufficient to meet demand at current levels, much less the
increasing levels expected by most observers.”
On the other hand, soybean futures dropped based on ideas that
the acreage projected for soybeans would result in increasing
soybean carryover.
“No matter how strong the market signals are, planting
intentions eventually depend more on the weather,” Anderson
said. “In 12 of the last 20 years, the final corn acreage has
been lower than originally planned. As one would expect, in 12
of the last 20 years, the final soybean acreage has been higher
than initially planned.”
Dan Poston, soybean specialist at MSU’s Delta Research and
Extension Center, said seed availability will be a big factor in
actual soybean acreage this year, especially in the mid-South.
“If growers have enough seed to plant 2 million acres of
soybeans, they’ll do it. Mississippi might be lucky to match
last year’s 1.5 million acres,” Poston said. “Growers will know
soon if they need to shift to rice, corn, or even cotton or
grain sorghum. Soybean growers who have obligated themselves to
deliver contracted soybeans might not be able to switch to other
crops.” |
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