After a rough 2019 planting season that saw 20 million acres go unplanted, the U.S. Department of Agriculture’s (USDA) outlook projections are calling for a significant bounce back in planted acres.
Corn and soybean acres are projected to increase, while cotton and wheat acres are expected to decline, according to American Farm Bureau Federation’s (AFBF) Chief Economist John Newton.
“Given an expansion in acreage for both corn and soybeans and a bounce back in yields, corn and soybean production are both going to increase in 2020,” he said. “Wheat production is expected to decline slightly in 2020 on the lower acreage and a slight yield reduction. Cotton production is expected to fall slightly based on a decrease in acreage but slightly offset by an improvement in yields this year.”
Newton noted they’re looking for exports, especially in soybeans, to bounce back this year.
“We’re expecting to see exports bounce back a little bit, still below where they were a couple years ago before the trade war started. We’re going to see soybean supplies tighten up again. That should lead to higher prices,” Newton said. “On the corn side, demand simply is not going to be able to keep up with supply, and thus USDA has corn stocks projected to be at 2.6 billion bushels, a record high and a slight decrease in the corn price for 2020.”
Overall, the livestock sector will see higher prices, according to Newton.
“USDA is expecting record production just about in all livestock categories. Dairy production is expected at 222 billion pounds, but we will see higher milk prices, higher pork prices, higher cattle prices,” he said. “I think the only sector where there is some weakness is going to be in the broiler space—lower prices there, but higher prices for eggs and turkey. Then, on the same side of the coin, lower feed prices for those folks.”