High prices will encourage a strong supply response. High grain and oilseed prices support another year of large plantings for wheat, corn and soybeans. Combined acreage for those crops topped 230 million acres in 2012, the highest since 1982.
"Plantings of those crops will likely approach similar levels for 2013," Joe Glauber, USDA's chief economist told participants and USDA's annual outlook forum Thursday.
Conservation Reserve Program enrollments are down again for 2013-14 to 27.1 million acres. Total CRP area has declined 9.7 million acres from its peak in 2007-08. Many of the 2.4 million acres that left the CRP last fall were located in the Northern Plains, in regions where wheat has been more traditionally grown but where corn and soybeans have made inroads in recent years.
Wheat seedings are projected at 56 million acres, up 300,000 from 2012. Hard Red Winter wheat area is down 0.7 million acres from 2012 due to the drought, but the decline has been offset by higher seedings of Soft Red Winter wheat, up 1.3 million acres from 2012 levels. Spring wheat seedings (including durum) are projected to decline due to more profitable returns for corn and soybeans.
Soybeans likely to rob acres from corn
Glauber expects a return to more normal spring weather to result in more soybeans and slightly less corn planted in 2013. Corn planted acreage is projected at 96.5 million acres, down slightly from last year's 75-year high. Soybean acreage is projected at 77.5 million acres which, if realized, would equal the record high level reached in 2009.
Increased Soft Red Winter wheat seedings will likely boost double-cropping and reduced CRP area in the upper Midwest could further hike soybean area.
U.S. upland cotton area for 2013 is projected at 9.8 million acres, a decline of 2.3 million acres from 2012. The reduction reflects lower expected returns for cotton relative to alternative crops (corn and soybeans in the southeast and Delta States and wheat, corn and sorghum in the Southwest). Similarly, Glauber expects a small decline in long grain rice area in the Delta where expected returns to soybeans look more favorable for 2013.
Weather to guide yields
Glauber expects yields for spring-planted crops to rebound from drought levels. "But weather remains key," he stresses. "Much attention will be focused on weather this spring."
As of February 12, about 56% of the United States continued to be in drought conditions. While the percentage of area in drought has declined about 5.4 percentage points since January 1, forecasts point to continued dryness in the central and southern Great Plains.
Weighted by seeded area, the hard-red winter wheat states of Kansas, Nebraska and Oklahoma have 50% of their wheat crop rated in poor or very poor condition compared to just 10% at this time last year. Spring rains will be especially important in the Great Plains where elevated levels of abandonment seem likely.