Based on the figures in the U.S. Department of Agriculture’s Prospective Plantings report released March 30th., livestock producers can anticipate shorter corn supplies and higher prices in the coming year.

Leading up to the report, analysts expected that planted corn acreage could decline this year, due to higher prices for inputs such as fuel and fertilizer. Those predictions appear accurate, with the report, based on a survey of about 69,000 farmers, projecting corn plantings at 76.7 million acres, down 4 percent from last year. If actual plantings fall in line with these intentions, U.S. corn acreage this year will be the lowest since 1995.

Much of the acreage taken out of corn production will produce soybeans, the report indicates. If plantings match the projections, soybean acreage will set a record in 2001, and match corn acreage at 76.7 million acres. Hay and Sorghum acreage also will increase over last year, according to the report.

The Livestock Marketing Information Center notes that U.S. corn stocks are likely to post year﷓to﷓year declines during the 2001/02 crop﷓marketing year unless the national average yield
compensates for the acreage decline. For stocks to be unchanged in this crop year compared to last, LMIC notes, the national average yield, based on prospective plantings, will need to be 142 to 143 bushels per acre or about 4 bushels above the 1994 record. Average yields at that level are possible, but unlikely, especially if producers scale back on fertilizer, crop protection or irrigation in response to higher costs.

With fewer acres planted, the corn market this summer will be especially sensitive to any weather trends that threaten yields. Livestock producers should consider the likelihood of rising corn prices as they plan their risk management and marketing strategies for the coming year.