Input prices and commodity prices; two halves of the 2022 acreage puzzle

A University of Illinois ag economist says the market may be overestimating the impact high input prices will have on 2022 planted acres.

Scott Irwin says high priced inputs like fertilizer will sway some planting intentions, but the costs are rising for both corn AND soybeans.

“Fertilizer costs are projected to go up for 2022 vs 2021 by $100 per acre for corn, but what’s lost in the discussion is that fertilizer costs are also going up about $50 per acre for soybeans, so the net difference is only $50 an acre.”

And he says input prices are only half of the equation, pointing to favorable commodity prices and farm income as the other half.

“So that can be offset fairly easily by swings in corn vs soybean prices. At least here for the heart of the Cornbelt, the economic incentives right now clearly are signaling plant more corn.”

His colleague Gary Schnitkey is projecting right now in Illinois that corn will be more profitable than soybeans by $30-$40 an acre.

farmdoc team projections as of 11/29/21

Irwin pegs intended corn planting at 97 million acres, an increase from last year with a season average price of $4.25, compared to USDA’s estimated $5.45. Irwin projects intended soybean planting at 86 million, down from last year with a season average price of $11, compared to USDA’s estimate of $12.10.  

Irwin says those incentives also lead him to predict a 7.2 million acre increase in total US crop acres to 326.5 million in 2022.

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