Iowa soybean acres projected to hit eight-year high

Written by Theresa Rose on April 1, 2015

Ankeny, Iowa – Iowa soybean acres are expected to exceed 10 million for the first time since 2006, contributing to record plantings nationwide, according to today’s U.S. Department of Agriculture (USDA) Prospective Plantings Report.
Soybean acres statewide are projected at 10.1 million acres, up 2 percent from last year according to the report. Nationally, a record high 84.6 million acres are expected to be seeded, up 1 percent from last year.
Iowa Soybean Association (ISA) leaders are returning today from a 10-day trade mission to China, the world’s largest consumer of soybeans. The ISA delegation learned that China’s economy is projected to grow by about 7 percent.
“That should bode well for soybean demand over the next few years and possibly longer, but growth may be more moderate,” said Grant Kimberley, ISA market development director. “Potentially, this will help utilize production from extra acres.”
ISA leaders heard mixed messages about soybean demand from Chinese buyers. Feed utilization for pork has and could flatten while aquaculture and poultry are expected to grow. The net result should be a slight increase in soybean demand.
The USDA report said planting intentions are up or unchanged in 21 of 31 major soybean producing states. Iowa farmers are expected to plant the most soybeans nationwide. Illinois is second, projected at 9.9 million acres. Analysts say farmers are returning to more of a traditional 50/50 soybean-corn rotation due to tight margins.
Kimberley said yields at the end of the year are more important than acres. Production and supply dictate prices.
“Keep in mind, the U.S. blew past the old record yield last year so it would be highly unlikely to achieve anything better than trend-line yield following a record like last year,” Kimberley said.
Even with projected higher acres, total soybean production could still be lower than last year. Ideal August growing conditions are unlikely to be repeated, Kimberley said.
“A long growing season is ahead and a lot can happen with the weather,” he said.
Data shows U.S. farmers set record highs in production, yield and harvested soybean acres last year — 3.97 billion bushels, 47.8 bushels per acre and 83.1 million acres, respectively. Soybeans stored in all positions as of March 1 totaled 1.33 billion bushels, up 34 percent from a year ago, according to today’s USDA Grain Stocks Report.
May soybeans on the Chicago Board of Trade fluctuated between $9.60 and $10 per bushel throughout most of March.
“History has shown that the Chinese respond with stronger purchases when there are lower price opportunities,” ISA CEO Kirk Leeds said. “Our challenge this time is that we are also facing strong supply numbers with a strong dollar, which gives Brazil an additional market advantage over the U.S.”
ISA President Tom Oswald said that makes developing relationships with global buyers fostered through soybean checkoff-funded trade missions and market development efforts of high importance.
“Now more than ever, we have to invest checkoff dollars to find additional markets for U.S. soybeans in places like Thailand, Indonesia and eventually India,” Oswald said.
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