In its first crop production outlook for 2015 USDA on Thursday forecast U.S. farmers will plant less corn and soybeans this year, with the corn area posting the largest decline.
The drop in soybeans was less as low production costs should have farmers favoring them to corn, USDA said at it annual outlook conference.
Planted corn acreage is forecast at 89 million, down from 2014’s 90.6 million, while soybean acreage should slip to 83.5 million from 2014’s record 83.7 million. Wheat acreage will slip to 55.5 million from 56.8 million.
“Farmers are continuing to shift ground into soybeans to lower costs and improve crop rotations,” said Bryce Knorr, Farm Futures senior grain analyst. “While both corn and soybeans pencil out to losses at today’s prices, farmers have had some pleasant surprises with soybeans the past couple of years, with less yield variability than corn too.”
USDA expects a decline in the value of 2015 crop exports due to lower crop prices and to other countries increasing production. U.S. agriculture exports in fiscal 2015 (Oct-Sept) are forecast at $141.5 billion, the second highest on record, but down from 2014.
While the United States should lead the world in soybean exports in the 2015/2016 crop year, USDA Chief Economist Robert Johansson said on Thursday that Brazil could overtake the United States the following year and then grow its global market share to 46% by 2024, while the U.S. share slips to 33% that year.
The value of exports of China may be down in 2015, but that country should remain the largest destination for U.S. agriculture exports for the fifth straight year.
USDA forecast record U.S. meat and dairy production, with meat production seen at a record 95 million lbs, mostly due to more pork and poultry. Milk production is seen at a record 211.5 billion lbs. The increases are in response to record high livestock, dairy and poultry prices in 2014 and to lower feed costs.
USDA Outlook Highlights:
· The average U.S. corn price for 2015/2016 is forecast at $3.50 a bushel, versus 2014/2015’s $3.65. The soybean price was put at $9 per bushel from 2014/2015’s $10.20.
· Average 2015/216 U.S. wheat price is forecast at $5.10, versus 2014/2015’s $6.
· Net farm income will be down in 2015 to $73.6 billion, the lowest since 2007, due to lower crop and livestock prices, but farmers’ debt-to-asset ratio will rise only slightly and be the third lowest since 1960
· The cost to ship goods by rail should returns to more normal levels in 2015 from 2014’s elevated levels.
· The U.S. drought area will shrink, but will intensify in the southwest
· Land values should decline less than 1% in 2015