MISSISSIPPI STATE -- 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.”