As farmers across the U.S. deal with a challenging market this year, the United Soybean Board along with the U.S. Soybean Export Council warn farmers have to take into consideration a lot of factors this year.
“We had USDA come out with their expectations for the area for this next year and not seeing a lot of change in soy, some rebound in corn area. But we’re still weeks away from planting in many parts of the country, and the farmers are always balancing a whole suite of decisions. I always say farmers are going to balance what’s going to lead to economic viability and prosperity, gotta balance the economics with the agronomics, what’s going to be sound and best for your operation? Not just now, but for the years to come,” Mac Mashall, VP of market intelligent for the United Soybean Board said.
While there are other pressures ahead of planting, this year is a little more typical than what farmers faced last year.
“There were tremendous market disruptions going on. I mean, Russia had just invaded Ukraine two weeks prior. Everybody’s trying to figure out what this means for world grain and oilseed markets, what that’s doing to price, and, at that time, the market was calling for a lot of corn. There was an expectation we’re gonna have a large corn area, I think, particularly in light of the fact that so much of that supply was not able to get out of Ukraine. Corn prices were calling for it. But with fertilizer price pressure and availability being an issue, that led to some sort of a pullback,” Marshall said.
Marshall says economics are only part of the equation, noting a rise in corn prices last year when Russia invaded Ukraine.
“By and large people were like, ‘I know corn prices are where they are, and I know bean prices were there, but I’m going to do what I can to stick to a 50-50 rotation because I gotta manage that nitrogen cycle.’ That’s the sort of thing where if you’re only looking at the balance sheets, you’re just looking at the futures prices, you’re not getting the full picture of some of the other things that go into farmer’s psychology and decision-making in agronomy and making sure you’re a good steward of the land and managing your inputs as best you can.”
While there’s no doubt economics will play a big role this year with input prices still high, Marshall says that might lead to some last-minute acre changes between corn and beans.
“Fertilizer prices are not where they were last year, but let’s not pretend that it isn’t still a margin-compression issue. They’re still significantly higher than they were in 2021, and the same is true for a lot of inputs, so that factors into farmer’s decisions as well. It’s not just what’s going to grow well. It’s given input costs, can I make the right decisions that are going to shepherd the crop and put it in the best position? So, the big takeaway between now and the end of March? I think there’s still some time for that to volley back and forth,” Marshall said.
