July 1, 2014 in Business

Farmers plant record soybean crop; less corn

David Pitt Associated Press
 
Associated Press photo

A corn plant sits in a muddy farm field Monday near Dallas Center, Iowa. The U.S. Department of Agriculture says farmers are planting the smallest corn crop since 2010 but as expected have planted the largest soybean crop on record.
(Full-size photo)

Prices slump after report

 Prices for corn and soybeans plunged Monday after the report raised expectations of bumper crops.

 Sterling Smith, a commodities strategist at Citigroup, said funds that trade commodities dumped their holdings in response.

 “This report implies a very large soybean crop,” Smith said. “It took the market down spectacularly.”

 Soybeans slumped 71 cents, or 6 percent, to settle at $11.57 a bushel. Corn dropped 22 cents, or 5 percent, to settle at $4.25 a bushel.

DES MOINES, Iowa – The nation’s farmers planted the largest soybean crop on record this year by devoting millions of acres of land to the crop that had been used for growing corn, the U.S. Department of Agriculture said Monday.

Farmers planted 84.8 million acres of soybeans, which was nearly 11 percent more than last year’s 76.5 million acres. Among the states that planted record amounts of the crop were Michigan, Minnesota, Nebraska, New York, North Dakota, Ohio, Pennsylvania, South Dakota and Wisconsin.

Corn was planted on 91.6 million acres, which was nearly 4 percent less than last year’s 95.4 million acres.

“Corn might be king in the U.S., but soybeans are knocking on the palace door,” said Grant Kimberley, a corn and soybean farmer near Maxwell in central Iowa and director of market development for the Iowa Soybean Association. “The increase of soybeans has been dramatic the last couple of years here and I think the increased protein demand worldwide has a lot to do with that.”

About a third of the U.S. soybean crop is exported to China, where there’s a large demand for soybeans to feed hogs, poultry and dairy cows.

The change in planting was also due to a drop in corn prices and rise in soybean prices.

For much of the last decade, farmers in the primary corn and soybean growing states of the Midwest had greater profit potential with corn, the strong market driven largely by increasing demand from the ethanol industry. Corn prices surpassed $8 a bushel in August 2012, when a drought that gripped much of the nation reduced the supply of corn amid high demand.

As corn prices remained strong, farmers planted more acres to take advantage of higher profit. Acres planted in corn climbed and in some cases, farmers strayed from the common practice of rotating fields from soybeans one year to corn the next. For a few seasons, some planted corn followed by corn, which often decreases the per-acre yield of the crop because it doesn’t allow the soil to recover.

“We did increase corn acres a lot and there has been some switchback based on economics and guys are just getting tired of that corn on corn. It’s a tough thing to handle,” said Kevin Scott, who farms 2,500 acres in corn and soybeans near Valley Springs, South Dakota.

Even with reduction in corn planting, it will still be the fifth-largest corn acreage planted since 1944, the USDA said.

Many corn and soybean growing states have seen a stormy spring and too much rain has left some fields drenched and water pooling. That impact is yet to be seen, but it could cut into the actual number of corn and soybean acres harvested this fall.

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