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New Survey Shows Fight for Acres Ahead in 2008

There's a big battle shaping up for 2008 that will play out in the next few months. Spurred by record new crop prices and demand, U.S. farmers planted a mammoth corn crop in 2007 by undertaking a groundbreaking shift in acreage. But a new Farm Futures survey suggests this year was just the prelude to what's shaping up as an unprecedented battle to buy acres in 2008.

Thanks to a year-long rally in soybean prices, farmers are ready to shift back to their traditional rotations - a move that could tighten corn supplies to dangerously low levels, according to the magazine's market experts.

Produces responding to an August e-mail survey reported they were ready to cut corn acres by as much as 9% next year, putting the ground back to soybeans. The survey put 2008 corn plant intentions at 84.9 million acres, down from 92.9 million this year. Soybean seedings would surge to 72.6 million, up from 64.1 million in 2007. Wheat acres could fall slightly to 59.8 million, down from 60.5 million in 2007.

"This year's massive shift in acreage showed farmers have learned how to respond to the signals of the market," says Farm Futures Senior Editor Bryce Knorr, who directed the survey. "Now with stocks of corn, soybeans and wheat all projected to be tight in 2008, prices will decide what crops they plant."

Based on the August survey, Farm Futures forecasting model shows Sept. 1, 2009 corn supplies could fall to just 685 million bushels, even with significant rationing in exports and feed usage. Soybean stocks would barely grow at all despite the increase in seedings, while wheat supplies also would remain close to this year's tight projected levels.

"High input costs and attractive soybean prices have lured farmers away from corn's charm," says Arlan Suderman, Farm Futures market analyst. "Unfotunatlye, corn can't afford to give up 8 million acres without significantly reducing demand, setting up a classic bidding war for acres over the next six months."