(Bloomberg News) U.S. farmers will plant the most acres in a generation this year, led by the biggest corn crop since World War II, taking advantage of the highest agricultural prices in at least four decades.
They will sow corn, soybeans and wheat on 226.9 million acres, the most since 1984, a Bloomberg survey of 36 farmers, bankers and analysts showed. The 2.5 percent gain means an expansion the size of New Jersey, as growers target fields left fallow last year and land freed up from conservation programs.
Crop prices, some of which reached the highest averages ever in 2011, bolstered the economies of Midwest growing states, sent net farm income up 28 percent to $100.9 billion and pushed the value of farmland to a record $2,350 an acre, the U.S. Department of Agriculture estimates. Global food costs are down 11 percent from a peak a year ago as grain output rises from China to Canada, United Nations data show.
"There is unlikely to be any ground that won't be planted this year," said Todd Wachtel, a 40 year-old who farms about 5,700 acres in Altamont, Illinois, and plans to expand his corn fields by 21 percent when seeding begins in early April. "Farmers know that they have to plant more when prices are high because they may not last."
A bigger harvest in the U.S., the world's largest exporter of all three crops, will help compensate for shortages in the current crop year. Drought damage in Brazil and Argentina will probably spur the USDA to cut its global and U.S. grain-supply forecasts for the current season on Feb. 9, a separate Bloomberg survey of as many as 25 analysts showed. The USDA's first forecast for the year 2012-2013 crop year will be Feb. 23.
Farmers will sow corn, used to feed livestock and make ethanol, on 94.329 million acres this year, up 2.6 percent from last year and the most since 1944, according to the Bloomberg survey. Soybean fields may expand 0.4 percent to 75.309 million acres, the fifth-most ever. Both crops are harvested after the current season ends on Aug. 31. Wheat in the season that begins June 1 will reach a three-year high of 57.233 million acres, up 5.2 percent, the survey showed.
Corn may rise 7.1 percent to $6.90 a bushel in six months because of the damage in South America, before dropping to $5.25 in a year as U.S. farmers increase supply, Goldman Sachs Group Inc. said in a Feb. 2 report. Corn for delivery in December, after the harvest, fell 0.8 percent to $5.765 today, 10 percent below the March contract on the Chicago Board of Trade.
Wheat may tumble 18 percent to $5.50 by July and soybeans may drop 17 percent to $10.20 a bushel, analysts at commodity broker Allendale Inc. in McHenry, Illinois, said Jan. 21.
"The area is available to have huge crops this year," said Paul Meyers, a vice president at Foresight Commodities Services Inc. in Long Valley, New Jersey, and the former head of grain-market analysis at the USDA from 1974 to 1983. "We are headed for a surplus-supply situation."