(Repeats to address technical transmission error, no change in
* New crop price corn declined 7.1 percent in Jan/Feb
* Price drop second biggest of last 10 years
* Farmers locked in acres last fall with fertilizer
By Mark Weinraub
CHICAGO, March 8Recent declines in U.S. corn
futures prices have failed to dent growers' enthusiasm for
planting the feed grain this spring, even though soybean prices
have outperformed corn, farmers and analysts said.
Crop insurance guarantees, money spent on fertilizer and
recent rainy weather in key growing areas have cemented the
acreage decisions that farmers made in the fall.
The Chicago Board of Trade December corn futures contract
, which tracks the crop that will be harvested this fall,
shed 7.1 percent of its value over the first two months of 2013.
That was the second worst winter performance for the new crop
contract over the past 10 years.
The only bigger decline was in 2009, when new-crop prices
dropped 13.4 percent in the January/February time frame. By the
end of harvest that year, when farmers were delivering their
crop to elevators and processors, futures prices were just 1
cent above their end-of-February level.
Farmers have already prepared most of their corn acreage by
applying fertilizer, which is not necessary when planting
soybeans. Those tractor trips across the fields last fall to
apply fertilizer locked in the acreage for many farmers
regardless of what the futures market has done this winter.
"We are not going to change because we already have the
stuff down on our ground," said Garry Niemeyer, an Illinois
farmer. "I think most farmers made their plans last fall and
they are sticking to them. When you put anhydrous ammonia on or
some form of nitrogen and you spend that kind of money, you are
not going to plant soybeans."
Soybean prices also dropped during the first two months of
2013, but the declines were smaller than in corn as new-crop soy
futures lost just 3.3 percent.
Still, most farmers think that corn offers a better return,
even with the added expense of fertilizers and the higher seed
"In terms of input costs, they aren't dramatically that
different from last year," said Nicole Thomas, analyst with
McKeany-Flavell. "They can still make a pretty good margin at
the current levels."
Corn planted on high productivity farmland in central
Illinois is projected to return a profit of between $603 and
$678 per acre, depending on a farmer's crop rotation practices,
according to University of Illinois research. Soybean returns
were seen between $405 and $430 per acre.
Growers who have not had a chance to apply fertilizer to
fields earmarked for corn will be closely watching the futures
market during the next few weeks to see if it provides a further
incentive to switch. But a quick harvest and dry weather across
the Midwest last fall gave most growers the chance to prepare
their fields for this spring, so there is not too much acreage
in flux, Niemeyer said.
The U.S. Agriculture Department has projected 2013 corn
acreage at 96.5 million and soybean acreage at 77.5 million. It
will update its acreage outlook based on farmer surveys at the
end of the month.
USDA's Risk Management Agency last week set floor prices for
crop insurance policies at $5.65 per bushel for corn and $12.87
a bushel for soybeans across most of the U.S. crop belt.
Andrew Goleman, a farmer in Illinois who plans on splitting
his corn and soybean acreage evenly, said that last year's
drought, while devastating to the crop, made farmers more
comfortable with crop insurance and confident about their
acreage decisions for 2013. Many growers cashed in policies for
the first time ever in 2012 because of the drought.
Recent rains across key growing areas of the U.S. Midwest
have boosted much-depleted soil moisture levels and made farmers
more optimistic about this year's crop as planting season
approaches, also furthering their commitment to corn.
Soybeans fared better than corn did in last year's drought.
Corn yields plunged to their lowest level since 1995 as the crop
withered in the dry soils and scorching temperatures.
(Reporting by Mark Weinraub; editing by Jim Marshall)