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Explanation of lackluster market response to record prevent plant acres

An ag economics professor has an explanation for farmers wondering why the market hasn’t responded more favorably to 20 million unplanted acres in 2019.

Dr. Harwood Schaffer with the University of Tennessee says while last year’s total number of prevented plant acres is significant, the hit to production wasn’t nearly as big as the drought year of 2012.

“Unfortunately, we’ve been producing steady enough that the market has said ‘they’ll produce more next year.”

Presenting at the 2020 National Farmers Organization Convention in the Twin Cities, he says the stocks-to-use ratio has stymied prices.

“And it doesn’t want to jump and make a bubble unless there’s significant pressure. For 2012, it took two short crop years before that before we had the big bump in 2012.”

Corn prices peaked that summer at a record $8.28 per-bushel.