USDA economists expect farmers to increase plantings of corn this spring while reducing their soybean production as the Trump administration's ongoing trade war with China remains unsettled.
USDA Chief Economist Rob Johansson, speaking at the department's 95th annual Agricultural Outlook Forum on Thursday, also forecast a record amount of meat and milk production in the year ahead but warned that the farm sector faced a good deal of uncertainty as growers prepare for planting.
“There are questions about trade, policy, weather, and market information, all of these have an impact of course on what farmers are planning to do this coming year,” he said. “It makes the outlook less certain than perhaps since the first year of the Freedom to Farm Act in 1996.”
On the crop side, producers are expected to plant 85 million acres of soybeans, a 4.7 percent drop from last year’s production. Trade factors play a role in that decision, Johansson said, as producers react to the issues with China, a major export market for U.S. soybeans. Prices are expected to slightly increase, jumping 2.3 percent to an average of $8.80 per bushel.
Johansson said the current U.S. soybean carryout situation – up 472 million to a record 910 million bushels – will take years to unwind from a price perspective, potentially until 2020.
Some of those acres will be shifted to corn, as USDA anticipates a 3.3 percent increase in acreage to 92 million. Prices are expected to remain mostly flat, jumping about 1.4 percent for an average of $3.65 per bushel.
In the livestock sector, hog prices are expected to drop this year, taking a 7.5 percent year-over-year dip. Steer and broiler prices will be mostly stable – up 1.2 percent and down 0.8 percent, respectively – and milk prices are pegged for a 6.5 percent increase to $17.25 per hundredweight.
Animal proteins are all expected to approach or achieve record highs in 2019 as the beef, pork, chicken, and milk sectors all boost already solid production levels. Pork production is eyed for the biggest production increase (3.8 percent to 27.3 billion pounds) followed by beef (up 2.7 percent to 27.6 billion pounds) and broilers (up 1.4 percent to 43.1 billion pounds). All considered, total meat production is expected to jump 2.3 percent.
Milk production is expected to remain stable, experiencing a 1.1 percent increase to 220.1 billion pounds.
Some other highlights from Johansson’s outlook:
- Wheat acres and price are both expected to remain mostly stable; acreage is anticipated to drop 1.7 percent to 47 million acres, price up 1 percent to $5.20 per bushel.
- Rice acreage is expected to fall just shy of 10 percent to 2.7 million acres, but prices will be mostly flat. USDA predicts a modest 0.8 percent increase to $12.20 per hundredweight.
- Cotton acreage will be mostly flat – up 1.1 percent to 14.3 million acres – but prices are expected to fall just shy of 7 percent to 67 cents per pound.
- Ag sector bankruptcies are still relatively low (about 2.35 declarations per 10,000 farms) despite continued tough times in farm country.
- Johansson said the overall debt-to-asset ratio remains relatively low, but he said the current trend “is likely to cause cash-flow problems for producers without significant land equity.”
- Total U.S. ag exports are expected to drop $1.9 billion to $141.5 billion for the current fiscal year. Over the next decade, USDA expects overall exports to grow.
The forum continues throughout the day and into tomorrow with a focus on export growth and the use of science and biotechnology in agriculture.
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