LA PORTE, Ind. — Corn prices are expected to dip this year and the best hedge against that is to plant more soybeans, said Purdue University agricultural economist Chris Hurt, during a statewide teleconference on Friday looking at the planting expectations of the nation’s farmers.

The teleconference was available at several locations in Indiana, including the LaPorte County Cooperative Extension Service at the LaPorte County Fairgrounds. 

With planting expectations for corn 142 million bushels fewer than anticipated for this year, Hurt said farmers shouldn’t expect a major price increase because all of the anticipated demand can be covered by stocks on hand and the crop to be harvested in the fall.

“Even though we’re going to have the highest corn acreage we’ve had since 1937, we’re going to be able to meet all of the demand out there, including ethanol, where production is up 4.3 percent,” he said.

Even with fewer corn acres, the demand will keep pace, said Hurt. That means even new and expanding markets like ethanol will be able to get all the corn they need.

Hurt said soybean expectations, on the other hand, are down, and with an increase export demand, there could be pressure to produce more.

“My message in this is that we’re going to have to plant more beans,” he said, adding the yields have fallen in South America, providing even more of an opportunity for U.S. producers.

He said while it’s difficult at this time of year to predict what U.S. corn yields might be, he said even an average crop of 162 bushels an acre might not be profitable for growers.

“With the early planting we’re having this year, we could see yields at less than the cost of production,” said Hurt. “Since we’re planting so many acres of corn this year, the price could drop from $7 or $8 a bushel to less than $6.”

A potential trendline Hurt produced showed corn prices this year at $5.35 a bushel and falling to under $5 a bushel in 2013 and 2014. “Supply is hitting demand,” he said.

At the same time, he said soybean prices have gained $1.80 a bushel compared to corn just since February. “The market is telling us we need more acres of beans,” said Hurt. “The market for new-crop soybeans is trending up and it is very strong. It’s a bullish pattern.”

Purdue agricultural economist Corinne Alexander joined Hurt in the presentation and agreed with that assessment. She said farmers planning a 50/50 mix of corn and soybeans might want to reconsider their planting intentions and move to a 60/40 mix of soybeans over corn.

The silver lining for corn, said Hurt, is there could be more demand from livestock producers if it dips back below $6 a bushel. “The demand from the livestock side could be significant because if that happens, the livestock industry is set to expand,” he pointed out.

U.S. corn growers also could see more demand from China, which is interested in importing more corn for its livestock industry. Hurt said China will remain a big importer of U.S. soybeans, as well. “China is a huge soybean buyer in this country.”

The Purdue teleconference was held just hours after the USDA announced its Prospective Plantings report, which was in line with what Hurt and other crop experts at the university anticipated.

The USDA said the biggest impact on the planting report for 2012 was the amount of grain being carried over from last year.

More than 95.8 million acres of corn are expected to be planted this year, up by nearly 4 million from 2011. At the same time, 73.9 million acres of soybeans are to be planted, down by nearly 1 million from last year.

The total acreage to be planted – everything from the major commodities like corn, soybeans and wheat to tobacco and garbanzo beans – is put at more than 255 million acres, up from 250.8 million acres last year.

“Where did those additional acres come from?” asked Hurt. “Some 1.5 million acres of that was land released from the Conservation Reserve Program and the rest is on land that was prevented from being planted last year because of flooding.” Most of that acreage, said Hurt, was in the Dakotas and Ohio.