Crop Production And Land Use Changes

By: Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

USDA-NASS released the first estimates of 2017 crop planting intentions the end of March.  Early planting intentions for corn were down 4.3 percent from last year at 90.0 million acres.  Soybean planting intentions were up 7.3 percent at 89.5 million acres.  A relatively high soybean to corn price ratio is driving the switch, not because soybean prices are particularly attractive but because corn prices are so unattractive.  2017 wheat planted acreage is also down 8.2 percent from one year ago at 46.1 million acres, again driven by unattractive wheat prices.   This follows a general trend of decreasing wheat acreage resulting in the lowest all wheat planted acreage since 1909.  In addition to increased soybean planting, cotton planting intentions are up 21.4 percent at 12.2 million acres.

These planting intentions could change given market reaction to the report and depending on weather conditions during planting.  The prospect for somewhat higher corn prices and lower soybean prices may mitigate some of the dramatic acreage shift in these early intentions resulting in higher corn acreage and lower soybean acreage than currently indicated.  From a feed perspective, decreased corn (and grain sorghum) acreage raises the chances for a slightly higher 2017 crop year corn price and, perhaps more importantly, increases the risk of higher feed grain prices should adverse weather conditions develop during the 2017 growing season.  In the meantime, higher than expected grain stocks remain from the record 2016 corn crop, which should keep feed grain prices favorable for the remainder of the 2016 crop year.

At 90 million acres, the 2017 corn planted acreage would be just slightly under the 90.8 million acre average of the last decade (2008-2017).  This compares to the previous decade (1998-2007) average of 80.5 million acres. Similarly, the most recent decade of soybean acreage is 79.9 million acres, including the estimated record level for 2017, compared to the prior decade average of 72.9 million acres.  In total, corn and soybeans have accounted for an average of 17.3 million more acres in the past decade compared to the prior decade.  Comparing the same two periods, wheat acreage decreased an average of 5.8 million acres; all hay harvested acreage decreased an average of 5.3 million acres while cotton acreage decreased 3.6 million acres.

Another land use shift occurred in pasture acreage.  Data on pasture acreage is not available every year but the most recent National Resource Inventory (USDA-NRCS) showed that from 2007 to 2012 pasture acreage in the eastern half of the country, including the major cropping areas of the Midwest, decreased by 2.2 million acres.  Increased corn and soybean acreage, particularly in the Midwest, was accomplished by reducing Conservation Reserve Program (CRP) acreage, pasture acreage, and harvested hay acres.  Cow-calf producers in the Midwest report that pasture and hay are in limited supply and expensive, making it difficult to compete with cow–calf production in other regions.

This raises the question of whether lower crop prices will result in reestablishment of pasture in the Midwest and other major cropping regions.  There may be some short term increase in annual crops for hay and pasture in these regions.  In the current crop intentions, projected total harvested hay acreage is down slightly, year over year, for the U.S. but hay acreage is projected to be up year over year in Iowa, Minnesota and Nebraska.  Data is not yet available to determine if perennial pastures are being reestablished in major crop areas.  However, it seems unlikely at this point in time.  Reseeding pastures would require fences, water development for grazing and an expectation of several years of beneficial use for grazing.  Until or unless crop prices remain depressed for an extended period of time, there will likely continue to be less hay and pasture forage resources available in major crop regions compared to earlier periods.