The Risks of Good (and Bad) Intentions


By this time of the year, most of you have moved from crop planning to execution. In all likelihood, you have adjusted your crop mix, have purchased your seed, and have begun or are close to beginning planting. Unless you have a field here or there that you haven’t fully planned around, it’s increasingly unlikely that you want to spend the capital to change your crop mix in any meaningful way.

If you’re like most farmers, you’re also starting to look at ways to manage the price you’ve begun setting with your crop mix decision. And because farmers are in the thick of planting, the first opportunity farmers often look to is the March Planting Intentions report and anticipated market movement when the June Planted Acres report drops. Of course, this all begs the question: how much opportunity is really there?



Acres Generally Do Not Change that Much


As you and every other farmer move from planting intentions to planting, you make adjustments to your crop mix. You may decide to pull back on corn and put more of your mix in soybeans, and a farmer the town over might make the opposite decision. Bear in mind that if you (along with your friends and relatives) are going heavier in one direction, you may think your sentiment will be reflected in June actuals. The data, however, shows that the actuals in aggregate don’t really move that much from intentions. Data over the past 20 years (2003-2023) bears out that acreage changes by less than 2%, on average, for both corn and soybeans.

Corn acreage tends to increase more than decrease.

  • Corn acres have deviated from March intentions to June actuals by an average 1.4% or about 1.2 million acres.
  • For fifteen of those twenty years, acres planted outpaced planting intentions by an average 1.1 million.
  • Acres planted underperformed planting intentions by an average 1.5 million for the other five years.

Soybean acreage change is slightly more meaningful, and it’s a 50/50 shot which way it will move.

  • Soybean acres have deviated from March intentions to June actuals by an average 1.8% or about 1.5 million acres.
  • For ten of those twenty years, acres planted outpaced planting intentions by an average 1.1 million.
  • Acres planted underperformed planting intentions by an average 1.9 million for the remaining ten years.

This makes sense. By March, you need to have a plan in action to buy seed and other inputs, and a major change in direction can mean real money. The market and the math need to be compelling to make up for the dollars already spent. Bottom line, on its own, don’t expect changes from the March to June report to have a significant impact absent other market shifts.



Expect Bigger Acreage Changes When the Market Demands a Change


As mentioned, the math needs to be compelling to make a crop mix change, in terms of a significant increase in demand or price or a significant protection in the costs of production. The chart below outlines the difference in actual June acres vs. March planting intentions over the past 20 years. Note that many of the biggest changes in acreage correspond to a major market shock in terms of demand, supply, price, or weather.



Let’s look at a few of the years with the biggest changes between intentions in March and actuals in June:


2023:    Corn prices rose high enough for farmers to move away from soybeans to corn.


2020:    COVID caused a collapse in prices. Soybeans, with their lower production cost, became relatively less unprofitable.


2019:    Markets rallied in May on wet weather. Corn became more attractive in an oversupplied soybean market, spurred by the trade war in China.


2007:    The price ratio of soybeans to corn collapsed upon the arrival of ethanol mandates and the subsequent increased demand for corn.


2004:   Corn rallied 15% from the period of data collection for the March Planting Intentions report.


Bottom line, acreage changes were driven primarily by market conditions, and not a bet on the direction of a report.



Takeaways for Your Marketing Strategy


When it comes to data over the past twenty years, the years where a change in acreage made an impact were also years when the market already offered farmers compelling financial reasons to anticipate an acreage change. A bet on acreage numbers alone without other fundamental shifts, on balance, do not seem to be advantageous to marketing decisions.

Instead of trying to guess where the market is going, it’s better to plan for wherever the market might go. That means making a plan that is flexible and adjusts as the market changes. Build a plan that helps you protect your price in the event the market goes up – or down. And be prepared to capture market opportunity as it comes to you rather than hoping to hit the top of the market.


Total Farm Marketing can help, as we’ve helped farmers for almost 40 years.


Have questions about how you can build a plan to help you in any market environment, or questions about your plan?


Call us at 800.334.9779.


©May 2024. Total Farm Marketing. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices may have already factored in the seasonal aspects of supply and demand. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing refers to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency and an equal opportunity provider. A customer may have relationships with any of the three companies.


Mike Vigneau

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