DES MOINES, Iowa (AP) — Farmers report they’ll plant millions of acres in soybeans instead of wheat this year as a global glut of the grain has made it unprofitable to grow.
In its annual prospective plantings report released Friday, the U.S. Department of Agriculture said wheat acres will be the lowest on record this year at 46.1 million acres and soybean planting will be at a record high of 89.5 million acres.
The United States has more than 1 billion bushels of surplus wheat in storage and the oversupply has driven wheat farmers in several states including Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio and South Dakota to shift previously planted wheat acres to soybeans.
“The big trend there is that wheat is grown in just about every continent around the world except Antarctica so those acres elsewhere have increased dramatically. The U.S. has lost production to the rest of the world,” said Todd Hultman, a grain market analyst for DTN, an Omaha, Nebraska-based agriculture market data provider.
He said wheat overproduction caused prices to collapse and made production unprofitable. Good growing weather for wheat worldwide for four consecutive years has been a contributing factor, he said.
Corn has experienced a similar trend leading farmers to cut corn acres 4 percent from last year to 90 million, the USDA report said.
If this year’s planting weather favors soybeans and more acres are shifted out of corn, this could be the first year since 1983 that farmers planted more acres in soybeans than corn.
Soybeans have produced large harvests too, but it is a hot commodity around the world with demand highest in China where soybean meal feeds pigs, cows and fish in a culture increasingly seeking to eat more meat. The record global demand has maintained more favorable prices for soybeans making them more profitable to grow than corn or wheat, said Chad Hart, an agricultural economist at Iowa State University.
This shouldn’t effect prices at the grocery store, although plentiful grain and soybean supplies lead to low livestock feed prices which help keep the cost of producing beef lower.
Friday’s report is based on a survey of farmers and is the first indication for the year of planting intentions.