Thursday, February 29, 2024

Growers could step up corn, rice production in ‘23

⋅ BY ROBERT NATHAN GREGORY ⋅
MSU EXTENSION SERVICE

If the newest Mississippi planting forecast holds, more corn and rice will be produced in 2023 compared to recent years, while demand will drive down cotton acreage.

The National Agricultural Statistics Service, a branch of the U.S. Department of Agriculture, released its annual prospective plantings report March 31. According to the report, intended cotton acreage is at 400,000 acres, down 25% from the 530,000 acres planted in 2022. Growers also plan to plant 700,000 acres of corn, which is 21% more than the 580,000 acres harvested last year.

Farmers anticipate planting about 2.35 million acres of soybeans — by far, the state’s largest row crop — this year in Mississippi, a potential 2% increase over 2022. Rice acreage is also projected to increase, with producers figuring in 100,000 acres of the crop, an 18% increase.

Survey data in each U.S. state are compiled during the first two weeks of March to provide the annual forecast.

“Corn acreage was held down last year due to high fertilizer prices, but with fertilizer prices easing down a bit this year, we saw an increase in intended acres,” said Will Maples, an agricultural economist with the Mississippi State University Extension Service. “Soybeans are again the dominant crop, with prices remaining strong. Rice acreage is projected up mainly due to higher prices and low acres last year.

“Cotton was the only crop down,” he added, “but this was expected as the cotton market is struggling relative to other crops due to demand issues. The overall sluggish macroeconomy and inflation has a bigger effect on cotton prices.”

Shortly after the COVID-19 pandemic slowed down, demand for cotton strengthened as lockdowns ended and consumers resumed retail shopping. The main driver in the current price weakness is reduced global demand because spinning mills have been down, Maples said.

“Chinese demand was weak through the fall and winter as they faced more lockdowns from COVID-19,” he said. “We are also facing issues with inflation in the U.S. As families tighten their budgets, one of the first things to go is items they can afford to put off purchasing for a while, such as clothing. Cotton takes a bigger hit from inflation than grains do because cotton makes goods consumers do not need to buy constantly.”

Fertilizer prices were at record highs in 2022 due to global fertilizer production issues and supply chain disruptions, but prices have stabilized so far this year.

“The Russia/Ukraine War also threw global energy markets into chaos, which didn’t help.” Maples said. “High fertilizer costs were the main reason we did not plant as much corn last year. Some drivers in the decrease are due to a decline in natural gas and corn prices.”

Corn planting has started in some areas of the state, but the rainy winter and outlook of wet weather to come could force some farmers to switch to another crop if they cannot plant corn on time.

“Weather will be the primary factor in any change in planting intentions for Mississippi producers. At this time of year, most producers have already locked in seed for the season, so they are less flexible to make planting changes based on market conditions,” Maples said. “The market will be using the planting intentions report as a benchmark, and then any weather events or perceived planting delays will drive market direction until we get the June acreage report on how much was actually planted.”

Maples and Hunter Biram, Extension economist with the University of Arkansas System Division of Agriculture, contributed to online agricultural publication “Southern Ag Today” recently to discuss the reliability of the annual report.

“The NASS planted acreage projections across the U.S. generally hold well with low predictive error and hold especially well for corn and soybeans. There appears to be a larger error, albeit still quite small, when predicting planted acreage for cotton and rice,” Biram said. “The larger variance can be due to the smaller sample size of farms and the alternative crops available to plant in place of corn and soybeans.

“In the South,” he added, “farmers rotate corn and soybean crops with cotton, peanuts and even some vegetables. This makes it more difficult to project acres that may shift based on rotational needs, commodity prices, input costs and weather.”

Other figures in the NASS include expected harvest estimations in Mississippi for hay (620,000 acres) and winter wheat (120,000 acres), both of which are expected to be larger than in 2022.

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