Allendale Report indicates large boost in corn acreage in 2007 Farm and Ranch Guide: Regional News

The entire agricultural industry is eagerly awaiting the first USDA Planting Intentions Report, which is scheduled to be released on March 30. The key question is how many acres will be diverted to corn production this year, because of the great demand for corn in the ethanol process and the resulting high corn prices.

The trade has been given an early indication of how big that acreage swing will be with the release of the Allendale Farm Survey, which was made public in early March. Their report suggests that an additional 12.4 million acres will be devoted to corn in 2007, raising the total corn acreage to 90.76 million. That would be the largest corn crop acreage since 1944, when 95.475 million acres were planted.

As expected, the largest increase in corn acreage will come, according to the survey, from main corn belt states, especially eastern corn belt states such as Illinois, Ohio and Indiana, and not from secondary states.

Some place a great deal of confidence in the Allendale Farm Survey, since it is one of the few, if not the only, true farmer-based planting survey, which saw a record number of farmers participate in this year.

This corn acreage figure is a substantial increase over the acreage projections that came out of the Allendale Annual Outlook Conference held in late 2006. At that time they were pegging corn acres to expand by 8.6 million acres, which translated into a price forecast for 2007 of $4.50 for an average farm price, with normal production levels.

But, with the new acreage figures arising from the farmer surveys, Allendale is now predicting the average farm price for corn, based on normal yields of 152 bushels per acre, at $3.20 per bushel for 2007. With this acreage and yield scenario, the ending stocks of corn would increase from the 2006 figure of 752 million bushels to 813 million at the end of 2007.

The Allendale Research Center has also projected scenarios where the nation's corn crop was poor, yielding only 126.5 bushels per acre, in which case the ending stocks figure would drop to 418 million bushels and the price would average $4 a bushel.

In the case of an overall good crop, where yields averaged 173 bushels per acre, the ending stocks would increase to 1.75 billion bushels an the average price would be in the $2.50 range.

The surge in corn acres will come mainly at the expense of soybeans, according to the survey. Soybean farmers are expected to plant 65.92 million acres, which represents a decline of 9.6 million acres from 2006. The state expecting the largest decline in soybean acres is Nebraska.

The survey indicated under normal crop conditions, the 2007/08 marketing year ending stocks for soybeans could fall to 334 million bushels, which is lower than the USDA's old crop forecast of 595 million bushels, which leads Allendale to suggest a $7.50 average cash farm price in 2007.

Total wheat acres are expected to increase 3.1 million acres to 60.49 million. This would be the largest wheat planting since 2003. Winter wheat acreage is expected to increase by 3.5 million acres, with the bulk of the increases in the hard red winter wheat areas, with Missouri, Nebraska and Kansas leading the way based on percentage increases. Spring wheat acreage is expected to fall back around 400,000 acres.

This increase in wheat acres could boost ending stocks to 535 million bushels compared to the 472 million bushels USDA expects for old crop. Based on those figures, Allendale is forecasting an average farm cash price for wheat of $3.70 a bushel.

As a final note, the survey noted that spring moisture levels are higher than normal, with areas in the southern corn belt being too moist. This moisture situation is a factor that needs to be monitored, since delayed corn plantings will often lead a grower to switch some of their acres from corn to soybeans.

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