UGA Economist Gives Outlook for Feedgrain & Soybean Crops

Source: Georgia Farm Bureau

During the Soybean/Feedgrain Committee Conference at the Georgia Farm Bureau Convention, UGA Extension Economist Dr. Adam Rabinowitz provided a 2017 economic outlook for corn, wheat and soybeans.He said corn acres are expected to drop while soybean acres are expected to increase much higher than long term projections.

U.S. farmers planted almost 95 million acres of corn in 2016 according to the USDA. Rabinowitz said he thinks U.S. corn plantings will remain about 90 million acres in 2017. Georgia growers planted 410,000 acres of corn this year, up 25 % from 2015, Rabinowitz said.

The demand for corn is strong, Rabinowitz said. Although livestock feed use is coming down, he expects the ethanol industry will increase its use of corn after the U.S. Environmental Protection Agency announced record biofuel mandates for ethanol use next year. He cautioned that ending stocks for corn will probably be high, which could cause corn prices to be lower than what farmers might expect. He said the cash price on Dec. 2 was $3.33/bushel and July 2017 futures were set at $3.616. Georgia prices are expected to range between $4.07 and $4.22/bushel.

Although Georgia farmers only planted 180,000 acres of wheat for the 2016 crop, 16 percent fewer acres than they did in 2015, they had higher yield at 46 bushels/acre and so had a seven percent yield increase over 2015 according to the USDA. However, Georgia's overall wheat production for 2016 was 5.06 million bushels, a 19 percent decrease from 2105.

Nationwide, USDA figures show wheat growers planted 50.2 million acres that averaged almost 53 bushels/acre. The USDA estimates total U.S. wheat production for 2016 totaled about 2.3 billion bushels. Rabinowitz said the U.S. total wheat supply is at its highest levels in over 10 to 15 years; fortunately the demand for wheat is the second highest it's been since 2000.

Rabinowitz said the cash price for wheat on Dec. 2 was $3.86 with July 2017 futures at $4.31. Georgia prices are expected to range between $4 and $4.27.

USDA statistics show Georgia soybean growers planted an estimated 265,000 acres, an 18.5 percent decrease from 2015. The U.S. soybean estimated planted acreage is 83.7 million acres. Georgia soybean yield is down at an estimated 35 bushels/acre, an 18.6 percent decrease from 2015. However, the U.S. overall has an increased yield estimated at about 53 bushels/acre and the U.S. soybean supply stocks are at record levels.

Rabinowitz said the demand is there for soybeans and U.S. soybean exports are strong due to drought conditions in South America, but prices are lower due to lots of soybeans on stock. On Dec. 2, the cash price for soybeans was $10.02 and the Sept. 2017 futures was $10.29. Georgia prices are expected to range between $9.40 and $9.62.

For more information, visit Georgia Farm Bureau.