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by Susie Taylor

Farmers don’t seem to react too much when USDA releases its periodic reports, but the commodity markets sure do, and this year’s market reaction has planted a smile on most farmers’ faces.

It’s hard not to smile a lot when you’re looking at new crop prices of $7.50 for soybeans and $3.15 for corn.

Those planting projections for 2004, released by the U.S. Department of Agriculture (USDA) on March 31, show that farmers nationwide are expected to plant 79 million acres of corn, a fraction higher than 2002 and 2003, and 75.4 million acres of soybeans, a 3 percent jump from last year. In the Buckeye State, corn growers intend to plant 3.4 million acres this spring, which is 100,000 acres more than were planted last year. Soybean acres are forecast at 4.35 million acres, up 50,000 acres from 2003.

The forecast prompted price rallies for both the current cash and new crop markets for corn and a slight upturn for soybeans. That 79 million acres of corn, even with a near record yield, still wouldn’t produce enough corn to meet demand, according to Alan Brugler, of Brugler Marketing and Management in Omaha, Neb.

"The whole purpose of (USDA’S planting intentions) report is to give producers an early signal of what everyone else is doing so they can change their minds," Brugler said. The report showed U.S. farmers should just barely produce enough soybeans to meet domestic and export markets, but not so with corn.

"The most corn has ever shifted in last 10 years (after release of the planting intentions report) is 1.698 million acres," he said. If producers would make that same switch this year, yield would be a tad more than 10.2 billion bushels. Last year’s domestic and export demand was 10.3 billion bushels, Brugler explained.

He added that a 1 million acre switch back to corn from soybeans could occur, but any more than that is unlikely. But to make that switch, producers need to see a much bigger corn price rally – and one that happens rather quickly – before they change their plans for this spring.

Dan Eichelberger of Ashland County said his family’s livestock pretty much determine what they do with one-third of their 1,100 acres, and crop rotations determine how they plant the rest of the farm.

Besides, they’ve already bought their seed. Like many farmers, the Eichelbergers pre-pay their seed. "So last fall we paid for a lot of these crops that we’ll be planting this spring," he said. "Most of our seed decisions were made then."

To go out of rotation would have other consequences to the farm, Eichelberger said. "If you plant beans back to beans, you have a yield drag because of disease pressure. The price would have to overcome that lower yield and other expenses." But, this may be the perfect year for double cropping soybeans into wheat stubble, he said

He added he’s glad to see the higher prices. "It’s encouraging a lot of farmers who have been struggling these past few years," he said. "It would be nice if we could keep them for a few years."

For Doug Hafer of Marion County, this year is just another season. "We always hope for the best. Last year it was so wet and rainy all year, but by the time harvest came around we were tickled with what our corn did."

He said USDA’s crop projections have a bigger impact on the markets than individual farmers. The March report "doesn’t impact our planting choices, but it might impact how and when we sell our grain more than anything else."

Market prices may be great for grain farmers, but livestock producers are looking at higher costs for feeding out their animals. And the United States is already seeing an impact on its soybean exports because of higher prices. Ending soybean stocks are predicted to be as low as demand will allow, so prices continue to stay up. USDA projected "the pipeline supply is as low as they can go," Brugler said. The commodity markets are looking at whether or not worldwide demand can be met through August. "That’s why prices went up so fast," Brugler added.

One thing’s for sure. Optimistic farmers are looking forward to another growing season. This year’s higher price projections are just the icing on the cake.