U.S. Farmers Plan to Increase Corn Acreage in 2023 Despite Risks

Plans for the upcoming season were made even as concerns about demand grew and soybean price gains outpaced corn late last year. However, early acreage forecasts and farmer interviews show that farmers' confidence in the largest crop in the United States has not dwindled.

A bumper crop from the world's largest corn exporter, combined with lower demand as global economic growth slows, could further ease prices for the staple used in fuel and animal feed, which have fallen since Russia invaded major corn producer Ukraine a year ago. The lower cost of key inputs such as fertilizer in the second half of 2022 fueled hopes that corn would be profitable in 2023, despite the fact that it typically necessitates a more active management style and greater financial investment than the No. 2 U.S. cash crop, soybeans.

"We're going to be heavy corn, probably the heaviest on corn we've been in a long time," said Brandon Hunnicutt, who farms 2,300 acres near Giltner, Nebraska, with his father and brother. Hunnicutt's farm's 2023 crop budget, developed as the 2022 harvest wound down, calls for about 90% of those acres to be devoted to corn. This compares to approximately 55% in 2022. Hunnicutt cited corn yield reliability as a key reason for going big on corn in 2023. It's a little more scientific with corn," he explained.

S&P Global Commodity Insights analysts predict that farmers in the United States will plant 90.5 million acres of corn in 2023, a 2.2% increase over the previous year, and a more modest 0.6% increase for soybeans, mirroring other early forecasts.

In order to maintain soil health, farmers in the United States rotate between soybeans and corn. After favouring soybeans last year when fertiliser prices skyrocketed, many farmers are planning to convert the majority of their fields to corn. "It would take something pretty monumental to move a bunch of acres around," said Scott Metzger, an Ohio farmer.

However, once harvest begins in September, corn bushels may have a difficult time finding a home. According to US Agriculture Department data, exporters have booked sales of only 24.038 million tonnes of US corn since last year's harvest, a 43% decrease from the previous year. The government issued its most recent corn export forecast for the entire year in January: 48.9 million tonnes, which was 19.8% lower than the initial export projection in May 2022.

Domestic corn consumption is expected to fall to a seven-year low of 304.561 million tonnes in the 2022/23 marketing year, down 4% from the previous year. 

According to recent USDA data, following a drought last August, farmers were forced to abandon the highest percentage of their corn acreage in the previous ten years. The weather this winter has done little to replenish soil moisture that the crop will require during the upcoming growing season.

Last year's harvest shortfall reduced corn supplies to their lowest level since 2013, giving farmers hope that prices will rise in the coming months. Ellen Rahn, an Illinois farmer, intends to devote approximately 75% of her farm's 1,600 acres to corn.

"After the 2012 drought ruined harvest across the Midwest, she followed a similar strategy of increasing corn acres, sending stocks to their lowest in nine years and supporting prices for the 2013 crop. We are in a good part of the world...where we are typically guaranteed decent yields," Rahn explained.