MITCHELL, S.D. - A 4 million-acre reduction in corn projected in 2017 could prove beneficial for farmers.
With corn prices falling from the $3.60 range to the around $3 from 2015-2016 to today, the commodity price could be in line for a bounceback if the U.S. Department of Agriculture's 2017 projections are correct.
Last summer, South Dakota State University Extension Crop Business Specialist Jack Davis said corn prices could improve with a 3 to 5 million reduction in acres planted nationwide. On Friday, March 31, shortly after the USDA's report was released, Davis maintained his outlook.
"I don't know that it's enough, but it should be positive for prices," Davis said.
A 4 percent reduction in corn production is also expected in South Dakota. The USDA projects a 200,000-acre drop in corn planted in the state, marking a return to the total acreage planted in 2015.
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And with 90 million acres planted instead of 94 million, Davis said it would increase the likelihood that less ending stock to use is carried over into 2018.
Whether the outlook matches the outcome, however, is unknown. And Davis acknowledged that the heavy amount of livestock to feed in this part of the country can make it more challenging for a farmer to shift from corn to another crop. He said some growers will shift their crops, but others might stick to their typical crop rotation.
"Now a lot depends on what actually happens - so growing season and planting season - but it does set up that possibility for new crop rallies," Davis said.
One crop looking at a big jump in acreage is soybeans, with a 7 percent projected increase in acreage planted.
Soybean acreage is projected to jump to a record-high 89.5 million acres in 2017, with South Dakota's acreage set to rise by 4 percent. Already one of the most productive soybean growing states in the nation, the USDA projects a 200,000-acre increase, which doesn't bode well for soybean prices.
"That will lower price if it's more than what's expected," Davis said.
The outlook for South Dakota wheat, however, is grim. USDA projects a 24 percent drop in winter wheat acres planted and a 13 percent drop for spring wheat, which Davis attributed to low profitability. Flaxseed production is also set for a large reduction in acreage, with only 3,000 acres expected compared to 10,000 acres planted in 2016.
