By JANE HOUIN
Ohio Correspondent

WASHINGTON, D.C. — With record corn prices pacing the way, the results of the USDA’s annual spring-planting report are no surprise: the USDA anticipates a significant increase in corn acreage for 2007 in order to meet demand prospect with that acreage primarily coming out of soybeans, spring wheat and cotton.

The USDA report indicates that America’s farmers will plant 12.1 million (15 percent) more acres of corn than last year, a total of 90.5 million acres. If realized, this would be the highest acreage since 1944, when 95.5 million acres were planted for all purposes.

The USDA report is based on a survey of the planting intentions of more than 86,000 farmers during the first two weeks of March conducted by the National Agricultural Statistics Service.

“Prior to the report I had expected that 87.5 million acres would be planted to corn, which is up 12 percent from year-ago levels,” said Terry Francl, AFBF senior economist. “These numbers all represent a substantial increase, but you also have to look at it from a historical perspective, and then you will see that today’s report is only a 10.6 percent increase from 2005.”

In Ohio, those numbers equate to 3.6 million acres of corn in 2007: 116 percent of the 2006 crop acreage. In contrast, Ohio soybean acreage is expected to be only 95 percent of the 2006 crop acreage: 4.4 million acres for 2007.

“In light of this information, the U.S. Department of Agriculture will no offer penalty-freee early releases from Conservation Reserve Program contracts at this time,” USDA Secretary Mike Johanns said.
“At the same time, we are not planning to conduct a general CRP signup in 2007.”

Johanns emphasized that enrollment of acres that qualitfy for continuous signup is ongoing, such as filter strips and riparian buffers.

“In fact, last week, USDA announced our intention to enroll 500,000 acreas in new continuous CRP contracts to address specific habitat needs of fish or wildlife, including at-risk species, on a state by state basis.”

Johanns did not, however, rule out the possibility of changes to USDA programs should the current climate change.

The jump in corn acreage to corn is likely due to farmers responding to an intensifying demand for corn-based ethanol.

This demand was also largely responsible for pushing grain prices to a 10-year high, according to Francl. Corn futures had traded as much as 80 percent above year-earlier levels the past few months.
Con-sequently, U.S. farmers res-ponded to this market signal by switching acres from crops like cotton, rice and soybeans to corn, according to Francl.

“While I believe today’s report on planting intentions will help ease concern about our corn supply, I will continue to closely monitor the situation,” Johanns said.

“I will not hesitate in the future to make adjustment to USDA programs if needed to achieve a balance in the agricultural sector.”

The survey also reported that America’s farmers plan to plant 67.1 million acres of soybeans, the lowest total since 1996 and a decrease of 8.4 million acres compared to last year. The acreage allocated to cotton is expected to total 12.1 million acres, down 20 percent from 2006.

While acreage decreases are expected in all growing areas except New York and the Southeast, the largest declines are expected across the Corn Belt with the largest single-state decline expected in Illinois.

USDA estimated rice acreage at 2.64 million acres, down 7 percent from 2006 and down 22 percent from 2005, which would be the lowest planted acreage since 1987.

There are other crops USDA predicts will see an increase in planted acreage such as wheat, which is expected to increase 5 percent from 2006, to 60.3 million acres.

The increased acreage predictions also suggest that this year’s corn harvest may rise to a record, topping the prior peak of 11.8 billion bushels in 2004.

The USDA on March 2 forecast that demand for corn will rise 4.8 percent to 12.33 billion bushels in the marketing year that begins Sept. 1 compared with 11.76 billion this year.

Based on today’s planting report, Francl said corn production in 2007 could top 12.5 billion bushels and add slightly to the carry over stocks, which is a key component in price determination.

Francl said only time will tell how many acres are actually planted for the production of corn, but in the meantime interested parties need to realize that the weather has the power to trump all predictions.

“This is just the first step in the long process of the growing season. The crop must actually get planted, go through the critical pollination period, the summer heat and finally be harvested,” Francl said.

“Weather is an important variable at each juncture that will determine the final crop size.”