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St. Charles, IL – While investors flocked to bonds for safety amid COVID-19 fears in recent weeks, farmers are resorting to their own version of a safe-haven asset: planting more corn acres.
According to Farm Futures’ latest survey, U.S. farmers intend to plant 96.4 million acres of corn during the 2020 planting season as a record number of 2019 prevented plant acres come back into 2020 production. Acreage projections for the 2020 season are the second highest planting on record after 97.3 million corn acres were planted in 2012. The USDA releases its Annual Planting Intentions survey next Tuesday, March 31.
Our result is over 2 million more corn acres compared to USDA’s forecast of 94 million acres, released February at USDA’s Annual Outlook Forum. In the time between the two forecasts, the COVID-19 pandemic upended the global economy. Increased economic uncertainty, historically cheap input prices, and weakened soybean demand from China appears to have made corn the most optimal production choice amid limited options for Midwest farmers.
Survey respondents expect U.S. corn plantings to increase 6.7 million acres from last year’s planted acreage. Using a five-year average yield from 2014-2018, 2020 production could top out at a record-high 15.2 billion bushels, inflating domestic supplies following a lackluster year of exports.