ANNAPOLIS – Maryland farmers will try to cut their losses caused by low market prices and last year’s drought by planting less corn this year, according to an agricultural report released Wednesday.
At the same time they’re planting fewer acres of corn, farmers in the state are weighing whether to plant more soybeans, a potentially more profitable crop, according to Chuck Less, a statistician at the Maryland Agricultural Statistics Service, which released the report on spring planting.
Unlike farmers, consumers will feel little effect from reduced crop production and will see very little change in prices, according to Kevin McNew, assistant professor and marketing specialist at the University of Maryland’s Department of Agricultural and Resource Economics.
“That’s unfortunately the way of the world right now. What consumers pay and what farmers get is very different,” he said.
Although farmers were concerned that a lack of rain would affect this year’s crop, state officials seem optimistic about this year’s weather.
“At this point, we’re not doing too bad for precipitation…as long as we receive timely rains,” said David Myers, with the University of Maryland’s Maryland Cooperative Extension.
But some farmers still think the ground is too dry.
“Most of the corn you’ll see this year will be under irrigation because it’s just been hit too much by dry weather,” said Dan Shortall, a poultry and grain farmer in Queen Anne’s County. “There’s not an adequate supply of water.”
Shortall, who sells seed, said most of his customers are buying soybean seed and very little corn seed. He blames the market as well as the weather.
“There’s not a lot of money to be made this year because the market is the way it is, anyway you go at it,” he said. Because of the government guarantees, he said, soybeans are more financially advantageous.
“You can farm the government better on soybeans,” he said.
Nationwide, farmers are steering away from corn and are moving toward soybeans because of higher price guarantees from the government for soybeans, Less said.
“Farmers will lose money either way” but they expect losses not to be as great with soybeans, Less said.
If the market price falls below a certain level, the government guarantees to pay $5.25 a bushel for soybeans and $1.90 a bushel for corn, McNew said.
“It costs a heck of a lot less to grow soybeans” relative to growing corn this year, he said.
But others say that farmers in the state will continue planting in the same proportion as they have in the past because they have no alternatives.
“They’ll split it down the middle,” Myers said. “No one’s breaking out and saying `Soybean’s bull,’ or, `Corn will be the one.’ It’s possible we’ll see more corn planted than soybeans this year.”
About 455,000 acres are expected to be planted in corn in 1999, the lowest level since 1995. Acres devoted to soybeans are expected to remain unchanged from last year’s 470,000 acres, the Maryland Agricultural Statistics Service reported.
Reduced planting is also predicted for small grains, such as winter wheat, barley and oats.
Across the United States, the predicted corn acreage is down 2 percent. The soybean acreage is forecast to increase by 1 percent, according to the statistics service’s report.
Although analysts expected the numbers to be lower, they are still pessimistic about the market.
“Prices are down this year,” McNew said. They “won’t get up enough for farmers to get above break-even.”
Last year, a bushel of corn cost about $2.50 compared to this year’s $2.20. A bushel of soybeans cost $6.50 in 1998. This year, it’s worth about $4.90, according to McNew.
Low prices will force farmers to cut expenses, such as for fertilizers and herbicides, and opt for the cheapest approach to planting, Myers said. “They’ll sharpen their pencils and cut as much inputs as they can,” Myers said. “They will re-examine their cropping budget and be more realistic.”
The lower planting forecast is tied to supply and demand. In 1995, exports were high because of a strong Asian demand for grain to feed livestock. At the same time, a drought resulted in less supply, driving up prices. Encouraged by a strong market, farmers planted more grain.
When the Asian market crashed in 1998, the export market dried up quickly.
“That led to the disastrous situation we have now,” McNew said.