by PressU.S. corn plantings will be reduced in favor of wheat and soybeans
Corn plantings will decline due to higher fertilizer prices
American farmers revised the volume of grain crops production in the current marketing year. They plan to increase the area for growing soybeans and wheat, while sowing corn will be reduced.
The industry ministry projects farmers will plant about 92 million acres of corn. That compares with 93.3 million acres last season. Soybean area will be increased, but not significantly — from 87.2 million to 87.5 million acres. As for wheat production projections, the area planted should reach 49 million acres, from 46.7 million acres a year ago.
The decision to expand cultivation of soybeans and wheat was taken against a background of rising food prices. In the world market the cost of strategically important production reached record highs for 10 years. Cereals and vegetable oils were the leaders in rise in price.
Wheat prices continue to rise. As early as winter, at the Chicago Board of Trade the futures for a bushel of grain exceeded $8, which was the highest value for 9 years. Experts explain these trends by a sharp decline in wheat stocks in the world market. Futures on soybean oil showed growth for several months in a row. They reached 73 cents per pound, which was a record high for the product. The main factors that caused the rise in oil prices were limited world stocks and increased demand for beans as a raw material for biofuel production.
U.S. farmers are being forced to cut back on corn because it requires more fertilizer than soybeans. At the same time, the cost of substances for plant nutrition and soil fertility is rising, as are other resources, making corn cultivation less profitable than it was a few years ago. Higher natural gas prices are reducing nitrogen fertilizer production, which in turn leads to risks to crop yields. Experts warn that production volumes and quality of crops may decrease. This is also the opinion of CF Industries, one of the largest fertilizer producers in the U.S.
It should be noted that the country has long held first place among the exporters of corn and second place in supplies of soybeans, the volume of which is second only to Brazil. In addition, the U.S. is the leading trader of wheat. However, analysts do not rule out that global trends of rising commodity prices and adverse weather conditions may change the balance of power on the market. And this concerns not only the U.S., but also Canada and Australia, which have already felt the decline in production.