Are USDA Sowing Estimates Too Low?

According to a report by agrimoney.com some are questioning expectations that farmers will curtail sowings because of a fall in crop prices to two-year lows.

The USDA said it believes U.S. farmers will plant 253.8 million acres with major crops for the 2014 harvest, down 700,000 acres from last year, and corn, soybean and cotton sowings will drop 1.1 million acres to 227 million acres.

However, last year was an unusually poor year for planting, with wet weather preventing farmers from sowing more than 8 million acres, far more than in a typical year. Furthermore, some 800,000 acres is expected to emerge from the CRP conservation program, on USDA estimates, adding to the potential area that can be sown.

One broker was quoted saying that if the USDA had “factored in acreage coming out of CRP or even a portion of the 8.3 million acres of prevent plant from last year, I haven’t found it yet.”