DES MOINES, Iowa Farmers will harvest nearly 9 percent fewer acres of corn this year than last year, in part because of Midwest flooding that has damaged a portion of the crop, the government reported Monday.
But the latest USDA figures also showed that farmers had planted more than a million more acres of corn than they had expected to plant in March, and corn futures prices fell in the wake of Monday's report.
The U.S. Department of Agriculture said farmers expect to harvest 78.9 million acres of corn, down 8.7 percent from the 86.5 million harvested last year.
The report also indicates farmers planted nearly 7 percent fewer acres of corn than last year 87.3 million acres versus last year's 93.6 million acres.
But the acres planted was still higher than the 86 million acres that farmers had anticipated planting in corn when asked about it in March.
Grain analyst Dan Basse, president of Chicago-based AgResource Co., an agricultural consulting firm, said high corn prices encouraged farmers to find more land to plant in corn.
Even with the anticipated reduction in harvested acres caused by flooding, Basse said a robust corn harvest could soften corn prices.
"They'll weaken with time and I don't see an economic reason why new crop corn futures need to be above 8 or new crop soybean futures need to be above 16 unless we have a drought," he said.
Corn futures, which were about $6 a bushel in early June, dropped nearly 30 cents to about $7.25 on the Chicago Board of Trade.
An ethanol industry trade group, Renewable Fuels Association, said the anticipated corn harvest will be enough to satisfy projected needs.
The group said it estimates a harvest of around 11.5 billion bushels, meeting projected demand and leaving about 800 million bushels left over. The USDA said about 4 billion bushels of corn remains in the nation's stockpiles.
"American farmers have once again proven their detractors wrong, demonstrating that they are uniquely capable of meeting the growing demand for feed, food, fiber and fuel," said RFA President Bob Dinneen in a statement. "Despite challenging spring weather conditions and an unprecedented flooding event, farmers have responded to the needs of the marketplace by planting the second largest area of corn since 1946."
Chad Hart, an agriculture economist with Iowa State University, said the report shows that farmers planted more corn than they had anticipated but some of it was washed away in the floods.
"What it means in terms of flooding impact on the area is, I hate to say it, that it was kind of a wash," Hart said. "Farmers were able to get in there and plant more corn but a lot of the surplus planted over March intentions was basically washed away by the floods."
The USDA report said spring rainfall totaled 20 inches or more from eastern Oklahoma into the lower Ohio Valley, disrupting planting and other spring field work. That is at least 150 percent of normal.
"Unfavorable wetness also covered much of the Midwest, hampering corn and soybean planting efforts," the report said.
The planted acres decreased in the 10 major corn producing states Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin in part because of high fertilizer prices, favorable prices for other crops and a return to normal crop rotation, the USDA said.
Illinois saw the largest decline, where farmers planted 12.3 million acres down from the record high of 13.2 million planted last year. Indiana decreased 800,000 acres and Minnesota, 600,000 acres.
Iowa continues to lead the nation in corn planted area with 13.7 million acres, down 500,000 from last year.
Despite the reductions, the planted acres is still the second highest since 1946, behind last year.
Harvest acres, if realized, will be the second highest since 1944, the USDA said.
The report also said planted soybean acres will increase 17 percent from last year to 74.5 million acres.
The planted soybean acres are expected to increase in all states and the planted area for soybeans is the third largest on record, the USDA said.
Nationally, farmers reported 79 percent of the soybean crop had been planted at the time of the survey last week, the lowest since 1996.
July soybeans were trading down 1 1/4 cents at $15.80.
The report says farmers have changed planting intentions for crops already planted and changed intentions for acres not planted.
Farmers intend to harvest 90.4 percent of their planted acres of corn for grain, down from the estimate of 92.4 percent as indicated in the first two weeks of June.
Hart said land that had been intended for other crops or that may have recently come out of the conservation reserve program were likely planted in corn, resulting in the uptick from earlier expectations.
The USDA reinterviewed 1,200 farmers last week to get the most updated information reflecting the impact of Midwest flooding.