Commodities, Sports, and Prognostication

Commodities and sports typically don’t go together most years. However, this fall, the two topics have come together in an interesting way.

Being a long-time sports broadcaster, I’ve noticed that when the major sports seasons wrap up, certain sports media love to immediately do what they call a “way-too-early” look to the next season. Evidently, it’s not just a sports thing.

I know harvest is just ramping up in many areas as I write this, but Farm Futures took what some might think is a “way-too-early” survey of planting intentions for 2023, and I couldn’t pass it up. It looks like corn will be king once again next spring among all commodities.

Commodities
Corn looks to be king when it comes to 2023 spring planting (photo from agriculture.com)

Jacqueline Holland is the grain market analyst for Farm Futures, and she wrote an article about the survey. She says the way-too-soon survey results are favoring corn for spring planting despite some challenges that come with the commodity.

“Even with higher fertilizer prices, farmers are still prepared to go all-in on corn,” she said. “Our survey found that farmers expect to plant 94.3 million acres of corn, a five percent increase from USDA’s current acreage estimates.”

If that prediction is realized, it would be the most corn planted in the U.S. since 95.4 million acres went into the ground in 2013. While soybean acres will be behind corn next year, U.S. growers are still sowing a lot of beans during spring planting in 2023.

“We expect farmers to plant 87.3 million acres of beans,” Holland said. “That’s almost a one percent decrease from this year’s acreage.” Cotton is one of the reasons that soybean acreage is going to drop a little. In the Mississippi Delta, a lot of acres in that region are going to provide “stiff competition” for soybeans during spring planting.

They also expect wheat acres to rise in 2023 thanks to more winter wheat acres in the Eastern Corn Belt. Farm Futures expects growers to plant 36.6 million acres of winter wheat. With more winter wheat acres going in the ground, spring wheat acres will back up from this year, with the 2023 estimate at 12.3 million acres.

“That means a grand total of 48.9 million acres of wheat will be planted in 2023,” she said.

Holland admits she was a little surprised at the survey results. She says there was a lot of price responsiveness to the rapidly-rising fertilizer prices heading into spring planting this year.

“When farmers were making their planting decisions in December last year, soybean prices were rallying strongly,” Holland recalled. “But with all of the issues we’ve seen with the flow of corn in the Black Sea this year, as well as the U.S. corn crop struggling with drought, corn has some bullish prospects for next year.”

She says if we do see a larger corn acreage next year, that might lead to some expansion back in the cattle market. In turn, that would likely revive some corn acreage in the Plains. Remember, about three million acres of corn went into prevent plant in the spring of this year.

Commodities
A Farm Futures Survey shows we might be harvesting a lot of corn again come fall of 2023. (Photo from kansasfarmfoodconnection)

“A lot of those acres were in the Dakotas and Minnesota,” she said. “Barring another bad weather event next year, I expect those acres to go back into corn in 2023.”

Farm Futures also has other questions in their survey beyond commodities and planting intentions. Those questions include where farmers are headed with input costs next year. Based on the survey responses, Holland says profit margins are going to shrink next year. The question is, how much?

“As of right now, it doesn’t look like growers are going to skimp on any fertilizer applications,” Holland said. “Most responses show farmers are ready to lock in their fertilizers at the lowest prices they can get. That will hopefully keep at least some liquidity in these crop budgets.

“We’ll see how these things ultimately shake out for planting and commodities,” she added. “There’s a long time between now and next spring.”

Farmer optimism hits an all-time low

Farmer optimism is in the dumper and there is no nice way to say it. COVID-19 and its economic impact, low commodity prices, trade wars, and weather have made life even more challenging. DTN found out that farmer optimism is at a record low. They’ve been doing a tri-annual survey of farmers for several years and this spring’s Agricultural Confidence Index hit an all-time low mark.

farmer optimism
DTN Editor-in-Chief Greg Horstmeier says farmers optimism hit an all-time low in their triannual Agriculture Confidence Index. (Photo from rushvillerepublican.com)

The baseline for their survey is 100. Everything below 100 is pessimistic, and any number above 100 is considered optimistic.

“We do our survey in the spring, just before planting,” said DTN Editor-In-Chief Greg Horstmeier. “We also do one at harvest, and then our final survey is in December, which is basically farm tax time. The drop in the index from the last time we did this in December is not a surprise, given everything that’s going on.

“It was a record-sized drop down to an index reading of 67,” he added. “That’s a 97-point drop, which is even more remarkable because we’re hearing that agriculture is moving on as normal. Everyone is either getting ready to or heading out into the field, so that big of a damper on the survey results is surprising.”

Horstmeier said spring is typically the most optimistic time of the year for farmers. New crops are going into the ground, which automatically means a fresh start, especially if the year before was as tough as 2019. Low optimism in the spring isn’t unusual. What’s unusual about this survey is how pessimistic farmers are about the future outlook.

The future outlook is typically very optimistic during the spring survey. “This year, that index reading was 73, which means it dove hard into negative territory,” Horstmeier said. “That was the big takeaway for me. Not only does the current situation have farmers in a pessimistic state of mind, but they don’t have a lot of promise for the foreseeable future.”

Another thing that really stood out was just how prevalent the pessimism is in different sectors of agriculture. It didn’t matter what farmers grew or how big their operations were, either. Even in down years, there’s typically difference worth noting.

“We typically see at least some differences between, for example, livestock and crop producers,” Horstmeier said. “We’ve also seen regional differences, such as the Midwest may be less optimistic than farmers in the Southeast. The pessimism was across the board, regardless of location, income level, the crops they grew, and what kind of enterprises they had.”

Speaking of Midwest farmers, in this year’s survey they showed the most pessimism currently, yet they also had the most optimism for the future. Southeastern farmers were more optimistic about their current conditions (89) but felt less optimism for their future (56).

DTN also conducts a similar survey of agribusinesses. The index level came in at a just-above-neutral 104. Agribusinesses rated their current conditions at a slightly pessimistic 85. However, they were above neutral when looking at the future, coming in at 118.

Here’s the link to the DTN survey article.

Organic farmers get to give their opinions to MDA

Organic farmers, the Minnesota Department of Agriculture wants to know what’s been on your mind lately. Feels a little like a rhetorical question but let’s go with it. There’s a survey on the way to your mailbox and it’s a great chance to tell the state’s Ag Department wants going on out there on the ground.

organic farmers

The state currently has 800 certified organic operations and they’re all getting a survey in the mail this month. The survey will ask Minnesota’s organic farmers to share both their opinions and experiences in the business these days. The survey will include 27 questions about several important topics, including profitability, production costs and challenges, research needs, marketing, and your overall outlook.

“The insights that organic farmers share helps us to focus programs and resources on areas that will make a difference in their bottom lines,” says Assistant Commissioner Patrice Bailey. “Organic market demand is very strong, and we want to do all we can to help existing and new organic farmers to capitalize on that fact.”

Minnesota’s organi farmers have an opportunity to share their opinions and insights in a survey coming from the Minnesota Department of Agriculture. It’ll land in the mailboxes of the 800 certified operations in the state very soon. (Photo from allianceforscience.cornell.edu.)

Organic products just continue to grow in popularity, and not just in Minnesota. The U.S. organic market hit a new record high in 2018, topping out at $52.5 billion in sales. The 2019 Organic Industry Survey from the Organic Trade Association says that’s up 6.3 percent from the previous year.

If you’re a certified organic farmer that doesn’t see a survey show up in the mailbox, contact MDA’s Organic Specialist Cassie Dahl at 651-201-6134 to get a copy of the survey. It’s your chance to tell the MDA what’s going on in the world of organic farming, as well as a chance to offer some opinions on how things can be even better.

The MDA says the survey results will be available on their website this fall.