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0208FG: Our first look at 2008 intentions

Darren Olsen, Editor Published on 09 April 2008
I have attended several hay conferences and conventions early this year and the leading question to many conversations has been, “What is happening with crop production acres this year?” One could also include, “What is happening with hay acres in my area?” along with it. Up until now, it has mostly been educated guesswork at best, and I thank everyone who has shared with me their feelings up to this point.

Fortunately, one day before this edition went to print, we were able to get a look at the 2008 Prospective Plantings Report from the National Agricultural Statistics Service (NASS).

This report contains the most up-to-date information regarding the intentions of farmers across the United States as to projected acres planted for most of the leading agricultural crops. While it doesn’t reflect what the projected yield will be for this year, it does give individuals a glimpse as to what we will be looking at for acreage estimates. As the inserted 2007 Hay Statistics show, rainfall will play a big part on overall yields and this report was based on information gathered before the major flooding events we have seen in the past few weeks throughout the Midwest.

In order to shed greater light on the overall look at how production acres are changing, I have included Figure 1 below, with the 2008 guesstimated acres as the final number on each of the respective crop lines. I also provide you with these summaries from the report:

• Hay:
Producers expect to harvest 60.6 million acres of all hay in 2008, down 2 percent from 2007. Harvested area is expected to decrease from last year throughout most of the Great Plains, Southeast, and Southwest. The state with the largest expected decrease is Texas, down 390,000 acres from 2007. South Dakota and Nebraska are expected to be down 300,000 acres and 150,000 acres, respectively. However, area for harvest in most states in the northern Great Plains, Western Mountain regions, and Northeast is expected to increase from 2007. The states with the largest expected increases from the previous year are North Dakota, up 120,000 acres, and Montana, Wyoming, Kentucky, Ohio, and Pennsylvania, each up 50,000 acres. In the West, minor increases are expected in Oregon, Nevada, and California.

• Corn:
Corn growers intend to plant 86.0 million acres of corn for all purposes in 2008, down 8 percent from last year when corn planted area was the highest since 1944. Expected acreage is down from last year in most states as favorable prices for other crops, high input costs for corn, and crop rotation considerations are motivating some farmers to plant fewer acres to corn. Despite the decrease, corn acreage is expected to remain at historically high levels as the corn price outlook remains strong due in part to the continued expansion in ethanol production.

• Soybeans:
Growers intend to plant an estimated 74.8 million acres in 2008, up 18 percent from the acreage planted in 2007. Last year, many soybean growers switched from soybeans to corn as ethanol expansion strongly increased the demand for corn. In contrast, many growers intend to plant more soybeans this year due to high prices and strong demand for soybeans. Compared with last year, acreage increases are expected in all states, except in West Virginia, which is unchanged from last year. The largest increases are expected in Iowa and Nebraska, up 1.25 million acres and 1.20 million acres from 2007, respectively. Increases of at least 800,000 acres are also expected in Indiana, Minnesota, and South Dakota. If realized, the planted acreage in Kansas, New York, and Pennsylvania will be the largest on record. Growers in the 11 major soybean producing states (Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and South Dakota) intend to plant 60.0 million acres, up 16 percent from last year.

• Wheat:
All wheat planted area is estimated at 63.8 million acres, up 6 percent from 2007. The 2008 winter wheat planted area, at 46.8 million acres, is 4 percent above last year and up slightly from the previous estimate. Of this total, about 32.5 million acres are Hard Red Winter, 10.7 million acres are Soft Red Winter, and 3.63 million acres are White Winter.

Area planted to other spring wheat for 2008 is expected to total 14.3 million acres, up 8 percent from 2007. Of this total, about 13.6 million acres are Hard Red Spring wheat. The intended Durum planted area for 2008 is 2.63 million acres, up 22 percent from the previous year.

While many people would stop and wonder what is happening to the hay industry through all of these hectic changes, I would say those individuals who are growing hay this year look to have a very good chance at having a very profitable year. I give two reasons for this prediction: no tie to the commodity markets and a strong demand for beef and dairy products.

My first reason for it being a good year, no tie to the commodity markets, is just that. No one is going to set the price for hay outside of normal market conditions. I find it interesting that hay has escaped the roller coaster ride other agricultural crops have faced on a regular basis. The art and craftsmanship of hay production is still one of the greatest allies a producer can have. Quality, not quantity still has a lasting impact on the hay industry and I don’t see that going away any time soon.

While some might feel a little slighted as to not having prices doubled like other crops, hay continues to be strong in the marketplace and tends to be a lot more stable in the long haul of year-to-year production. Most producers wouldn’t trade that for anything.

My second reason for looking at a good 2008 hay season is the close tie the hay industry has to the two leading agricultural profit centers in the country, beef and dairy. Both of these arenas of agriculture look to hold relatively strong throughout the 2008 season and no one is wanting to hedge their bets. If corn acres are really going to be down upwards of 8 percent, hay will be needed to fill a very large production gap this year for both of these industries.

I would like to add one last look at things as one state has put it. The University of Nebraska-Lincoln also released their state predictions in conjunction with the United States report. They stated:

Nebraska intentions

* Corn growers expect to plant 8.8 million acres for all purposes in 2008, down 6 percent from last year but still up 9 percent from 2006.

* Soybean growers intend to plant 5.0 million acres, up 32 percent from last year and just 1 percent below the record high set two years ago.

* Last fall, winter wheat was sown on 1.95 million acres, down 5 percent from a year earlier but 8 percent higher than the 2006 crop.

* Sorghum growers expect to plant 350,000 acres, unchanged from last year.

* Dry edible bean producers intend to plant 125,000 acres, up 14 percent from 2007.

* Sugarbeet plantings of 52,000 acres would be up 9 percent from a year ago.

* Sunflower planting intentions, at 45,000 acres, are down 8 percent from last year and the lowest since 1992.

* Hay acreage for harvest, at 2.5 million, would be down 6 percent from last year and the lowest since the series began in 1909. Oat planting intentions, at 100,000 acres, are down 17 percent from 2007 and the lowest in over 100 years.

Did you catch that last bulletpoint? Hay acreage would be at its lowest point since they started recording the information back in 1909 (at least in Nebraska). Figure 2 on the preceding page also points to a lower acreage count in the three major hay-producing areas of the country. While many individuals would question if hay production is in trouble, I would say that producers might well be looking at one of their finest hours in a very long time.

For most readers of our publication, I hope I am right. It continues to be a privilege to continue to serve the hay industry and I look forward to many more years of head scratching and number crunching with the best individuals agriculture has to offer. Just enjoy it while you can.  FG