DES MOINES, Iowa - Farmers nationwide are anticipating more profit from corn than other crops this year and planted 96.4 million acres of it this spring, the most in nearly eight decades, the U.S. Department of Agriculture said Friday.
The new acreage number, based on farm surveys from early June, reflects a 5 per cent increase from last year and is the largest amount of planted acres since 1937, when the nation's farmers planted 97 million acres of the crop.
The push is coming from higher corn prices and the expectation that corn demand will remain high thanks to exports, livestock feed and ethanol production, said Garry Niemeyer, president of the National Corn Growers board.
Farmers each fall review the prices of fertilizer, seed and other chemicals, and the price they're projected to receive from selling the grain. Many concluded that corn would be a better bet than other crops, such as soybeans, he said.
"They felt like they would probably make more money on corn," said Niemeyer, a corn and soybean farmer in Auburn, Ill.
And if the heat and lack of rain continue in corn-growing states, the increased planting could help offset losses due to the weather. A significant drought would drive up prices since demand for corn would remain strong despite a diminished supply.
However, higher corn prices mean livestock farmers have to pay more to feed their hogs and cattle, which means meat prices could climb at the grocery store. Higher prices also could impact the cost of other food that contains corn products, such as breakfast cereal, bread, salad dressing and chips.
"The good news is we did plant a lot more corn acreage this year. Because of the dry and the heat, we're losing yield by the day," said Paul Bertels, an agricultural economist with the National Corn Growers in St. Louis. "I don't think the corn supply is going to grow tremendously this year and there is potential for it to get smaller."
According to the USDA, the nation has 3.15 billion bushels of corn in storage, down 14 per cent from last year's June estimate.
Iowa — the nation's top corn producer — has the most acreage devoted to corn at 14 million, compared to 14.1 million in June 2011. Illinois increased to 13 million this month from 12.6 million last year, while Nebraska inched up to 9.9 million from 9.85 million, according to the USDA.
Record amounts of planted acreage are expected in Idaho, Minnesota, Nevada, North Dakota, Oregon and South Dakota.
The benchmark that analysts use is the price for corn that gets delivered by farmers in December, following the year's harvest. On Friday, corn for December delivery rose 1 cent to $6.33 a bushel, which is where corn has been trading this week and is significantly better than $5 to $5.50 price range the market has seen since April.