Farmers in the U.S., the world’s biggest corn producer, will plant the most acres since 1944, while the sown area for eight major crops is poised to be the second-biggest in the past 10 years, the government said.
Corn planting will cover 94 million acres in 2012, up from 91.9 million acres last year, the USDA said in its long-term projections report. Crops ranging from corn and soybeans to wheat and cotton will be sown on 251 million acres from 249 million acres, it said.
Crop prices, some of which reached the highest averages ever in 2011, bolstered the economies of Midwest growing states, sent net farm income up 28% to $100.9 billion and pushed the value of farmland to a record $2,350 an acre, the U.S. government estimates.
Global food costs are down 9.9% from a peak a year ago as grain output rises from China to Canada, United Nations data show.
The projections “make no allowance for supply shocks,” Paul Deane and Victor Thianpiriya, analysts at Australia & New Zealand Banking Group Ltd., wrote in a report today. They are based on “specific assumptions about macroeconomic conditions, policy, weather and international developments,” they said.
Production of corn will climb to 14.24 billion bushels from 12.31 billion bushels, said the U.S. agency. While Morgan Stanley also predicts plantings of 94 million acres, it estimates production at 13.78 billion bushels, the bank said in a report dated Feb. 12. Analysts in a Bloomberg survey predict an area of 94.329 million acres.
Soybeans, Wheat
Rising production will push corn stockpiles to 1.62 billion bushels at the end of 2012-2013 from 843 million bushels a year earlier, the USDA said.
Farmers will plant fewer soybeans this year, with the area declining to 74 million acres from 75 million acres because of competition from corn, the agency said. Wheat sowings will climb to 56.5 million acres from 54.4 million acres, while rice plantings may jump to 3 million acres from 2.69 million acres, it said.
Corn has the most potential to advance of all agricultural commodities as smaller Latin American crops lift demand for U.S. supplies, Morgan Stanley said. U.S. stockpiles will decline to 5.1 percent of use in 2011-2012, a “precariously” low level, said analysts led by Hussein Allidina.
Futures will probably rise to $6.90 a bushel in six months, Goldman Sachs Group Inc. said in a report dated Feb. 9. Prices have declined 0.6 percent to $6.425 a bushel this year after gaining 2.8 percent in 2011.
The eight crops listed by the USDA are corn, sorghum, barley, oats, wheat, rice, upland cotton and soybeans.