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CHICAGO (Reuters) - U.S. soybean plantings are set to rise above expectations following lengthy planting delays across the Midwest that have forced farmers to adopt new acreage plans.
The changes will be costly, as soybeans typically provide lower returns than corn that is seeded in a timely manner. The lengthy delays have pushed farmers right up to key insurance deadlines that hit on Friday, forcing them to make a decision about what to do with acreage they hoped would have been seeded weeks ago.
In northern Illinois, an area where planting is lagging behind the already slow national pace, farmers who switch to soybeans will likely get $42 per acre more than they would if they seeded corn in late May, according to the University of Illinois. That's a far cry from the $178 per acre advantage that was projected for corn seeded in early April.
"It is like watching your checkbook go down the river," said Dave Nelson, a farmer in northern Iowa, who had only 80 percent of his corn acreage seeded, the slowest pace in his 39 years of farming.
Farmers in major production states such as Iowa, Minnesota, North Dakota and parts of Illinois had a corn prevent planting date of May 31. Corn seeded after the deadline will only be partially covered by insurance.
During the five slowest planting years since 1980, actual soybean acreage has risen by an average of 935,000 acres above farmers' initial intentions. That compares with an overall average increase of just 8,000 acres.
Corn acreage dropped by an average of 599,000 acres during the five slowest years compared to the overall average of a loss of 180,000 acres.
In 1993, which was the eighth slowest year on record and in line with this year's progress as of the end of the third week in May, soybean acreage rose by 785,000 acres from intentions and corn planting was 3.3 million acres lower than planned.
Planting got off to the slowest start on record this year, as damp field conditions kept most farmers sidelined throughout April and much of early May.
When the weather finally cleared, farmers notched their biggest corn planting week ever - seeding 41.8 million acres in the seven days ended May 19 - but more rain in the past week has again pushed them well behind their desired pace and has left them 13.6 million acres short of their goal.
Corn seeded after the middle of May will likely pollinate during the heat of the Midwest summer, which can stress the plant and lead to yield loss in the fall. A late planting also puts corn at risk to damage from an early frost.
In Iowa, the biggest production state for both corn and soybeans, some areas were still soaked after the state received the most spring rainfall - 17.48 inches as of May 30 - since records began 141 years ago, state climatologist Harry Hillaker told Reuters.
Some drenched fields will likely take about a week to dry out, sharply raising the risk of farmers who were considering seeding corn after the prevent planting date had passed.
Soybeans, which mature faster than corn, can be seeded later but yields are typically about one-third that of corn. Prevent planting dates for soybeans range from June 15 to June 20 but many farmers will plant soybeans over taking the crop insurance until the end of June.
Farmers had planned to plant 97.3 million acres of corn this year, which would be the most corn acreage since 1936, according to the U.S. Agriculture Department's Prospective Plantings report issued in March.
The biggest increase in corn acreage was expected to come from North Dakota, where farmers had planned to seed 4.1 million acres of the grain, the most ever in the state and 500,000 more acres than they did in 2012. But the rainy conditions have slowed planting in North Dakota more than any other major production state. Farmers there had seeded just 72 percent of their corn acreage as of May 26, leaving them 1.15 million short of their goal.
The delays could cause North Dakota farmers to switch as much as 500,000 acres of their intended corn acres to soybeans, at a cost of $40 to $50 per acre in many areas, said Andrew Swenson, a farm resource management specialist at North Dakota State University.
Because of the cost of switching, some farmers will likely seed corn even after the prevent planting date mandated by their insurance, Swenson said. Insurance coverage generally drops by 1 percent a day for corn seeded after those dates.
The futures market has provided farmers an incentive to switch some acreage to soybeans instead of planting corn late. During the past month, prices for new-crop November soybeans have risen 7.1 percent to $13.11-1/2 a bushel. New-crop December corn was up just 1.8 percent at $5.69-3/4 a bushel.
Farmers also could leave fields fallow and collect insurance but most are loath to do so, even if expected returns from that path pencil out better than planting either corn or soybeans.
"Farmers have a bias to plant," Gary Schnitkey, a University of Illinois economist, said online in the Reuters Ag Forum. "It is what they do."
Reporting by Mark Weinraub; Editing by Bernadette Baum