June 30, 2020
Arkansas corn and cotton acreage fall; soybeans and rice make gains
By Ryan McGeeney
U of A System Division of Agriculture
- Arkansas corn acreage drops 17 percent from 2019, as ethanol market sees lower demand
- Soybean acreage gains over 2019 acreage, despite prices
- Cotton acreage drops sharply, but infrastructure investment indicates faith in brighter future
LITTLE ROCK — A global health crisis and its attendant economic impacts, unusually wet weather and an ongoing trade dispute with China had a discouraging effect on Arkansas growers’ acreage decisions for some key crops in 2020, even as farmers went all in on others.
The U.S. Department of Agriculture’s National Agricultural Statistics Service released its annual Acreage report Tuesday, revealing planting decisions that are measured not only against those of previous years, but against growers’ stated intentions in the spring. The report is watched closely by agricultural and financial professionals, as well as by policy makers, as it often casts the clearest insight into the likely availability of commodities in the coming months.
The 2020 Acreage report began with an unusual note, stipulating the 2.2 million acres of corn and 12.1 million acres of soybeans that remained to be planted nationally during the report’s survey period, which lasted from May 30 to June 16.
Two U.S. commodities that have been hardest hit by the COVID-19 pandemic have been corn and cotton, as reduced travel and clothing purchases have undercut demand for corn-based ethanol and cotton for the textile industry.
While corn acreage across the United States grew 3 percent over 2019 to about 92 million acres, Arkansas corn growers planted only an estimated 640,000 acres — a 17 percent decrease from 2019 acreage, and a 20 percent drop from the acreage growers declared they’d intended to plant when surveyed in March.
Jason Kelley, extension wheat and feed grains agronomist for the University of Arkansas System Division of Agriculture, said the lower acreage was likely due in part to the wet spring much the region experienced.
“It is not surprising that corn acres were less than anticipated this year, due to wet weather during March, April and May, which limited fieldwork and prevented planting during our optimum time to plant corn,” Kelley said. “If we would have had better planting conditions this spring, 800,000 acres of corn would likely have been planted.”
Scott Stiles, extension economist for the Division of Agriculture, said that between the higher-than-average rainfall and the economic impact of COVID-19, the drop in Arkansas corn acre was actually lower than he had expected prior to the release of the June 30 report.
“In January, growers had opportunities to do some pricing at around $4 per bushel,” Stiles said. “With the sharp drop in fuel and ethanol demand, new crop corn prices were trading below $3.20 by April. Combine that with the challenges we had getting the crop planted, and I’m surprised to see acreage above 600,000. Six-hundred and forty thousand acres puts us right in the middle of our 2017-2018 planted acreage totals.”
Nationally, cotton acres fell 11 percent from 2019 to an estimated 12.2 million acres. Arkansas upland cotton acres fell to 500,000 acres, a significant drop from both the 620,000 acres planted in 2019 and the 590,000 acres farmers had planned as of March of this year.
“The economic impacts from COVID-19 had a negative impact on cotton prices this spring,” Stiles said. “From January to March, cotton prices lost 23 cents. The December 2020 futures went from trading at 73 cents in January of this year to trading at 50 cents by the end of March — a game changer for growers.
“Weather was a challenge, too,” he said. “By mid-May, we hadn’t crossed the halfway mark in planting.”
Bill Robertson, extension cotton agronomist for the Division of Agriculture, said the decline in 2020 cotton acreage simply a “bad spot in the market,” one that Arkansas growers would likely rebound from over time.
“Arkansas growers ended up planting as much as we did because a lot of guys and gals who grow cotton have invested in their infrastructure,” Robertson said. “We’ve got new gins coming in. Even if you get a used round-module picker, then you’ve got $400,000-$500,000 invested. So, you need acres to run it on, just to justify the payment on that picker.
“A lot of growers are just locked in,” he said. “Investing in cotton isn’t a short-term thing, it’s a long-term commitment. You’re either in it, or you’re not. The cotton market just hasn’t gotten its feet back under it yet. I think people are anticipating that it will be better next year.”
The brighter side of things
The state’s strongest commodity crops — soybeans and rice — fared better, with rice acres soaring toward Arkansas’ limits, and soybeans doing better than expected.
Nationally, overall rice acreage, including long-, medium- and short-grain rice, increased by about 16 percent, from about 2.5 million acres in 2019 to more than 2.9 million acres in 2020. In Arkansas, all rice acreage increased by 24 percent to more than 1.4 million acres, exceeding March’s planting intentions by about 40,000 acres.
Arkansas long grain rice accounted for the entirety of the state’s increased rice acreage, expanding from 950,000 acres in 2019 to about 1.25 million acres in 2020, while medium grain rice acres actually fell more than 20 percent to 180,000 acres.
Jarrod Hardke, extension rice agronomist for the Division of Agriculture, said he had expected rice acreage to approach the state’s total capacity.
“Acres were expected to exceed the March Prospective Planting report,” Hardke said. “However, a persistently wet spring prevented acres from reaching above 1.5 million, where they realistically would have likely gone, had better opportunities to plant presented themselves.
“To achieve greater than 1.4 million acres this year, growers had to get very creative,” he said. “Growers planted in less-than-optimal conditions more often than not, but their efforts mostly paid off and we achieved more planted acres than some thought possible.”
Nationally, soybean acres grew 10 percent, to an estimated 83.8 million acres. In Arkansas, growers stayed true to their March declarations, planting about 2.95 million acres, an increase of more than 11 percent over 2019’s 2.65 million planted acres.
Stiles said that while soybean commodity prices have remained depressed for several years, the troubles affecting agriculture generally may have again made soybean a better bet than competing options.
“Soybean prices have not enticed growers to plant,” Stiles said. “This spring, November soybean futures have basically been locked in a range from $8.40-$8.80. The challenges of getting corn and cotton planted may have shifted some additional acres to soybeans.
“In a low-price environment like we've seen this spring for cotton, corn and soybeans, maybe growers chose the crop with the lowest cost of production,” he said. “Generally, soybean production costs would be $250 to $300 per acre less than cotton or corn.”
Jeremy Ross, extension soybean agronomist for the Division of Agriculture, said there were several reasons Arkansas fell short of the 3-million-acre mark this year.
“With the somewhat depressed soybean prices and better returns with rice, rice has taken some acreage away from soybean,” Ross said. “There have been some reports that China is buying U.S. soybean, and sales are better than what was seen in 2019. However, we are still below the average sales of U.S. soybean to China prior to 2019. Hopefully, we can push more soybean to China this year and get some better prices later in the year.”
Ross said that concerns over the Environmental Protection Agency’s move in early June to cancel current registrations of several formulations of dicamba likely had little impact on this year’s soybean acreage, owing primarily to the May 25 cutoff date for in-crop use of the pesticide.
“I don’t think the dicamba registration had any play with the acreage report,” Ross said. “The ruling on dicamba came after the Arkansas cutoff on over-the-top applications of dicamba, and many of the producers knew what acreage and herbicide technology they were going to plant for 2020. If dicamba is not available in 2021, at least we still have options with the Liberty Link and Enlist systems.”
Nationally, acreage for all wheat fell 2 percent to an estimated 44.3 million acres, representing the lowest recorded wheat acreage in the United States since 1919. Winter wheat — which is primarily what’s grown in Arkansas, fell slightly across the country, from about 31.2 million acres in 2019 to about 30.6 million acres in 2020. In Arkansas, however, growers went in on a 27 percent increase over 2019 acreage, planting 140,000 acres of winter wheat — which was still 20,000 fewer acres than what was reflected in the Prospective Planting Report earlier this year.
Nationally, peanut growers planted about 1.5 million acres, a slight increase over 2019’s 1.4 million. In Arkansas growers planted 35,000 acres, an increase of 1,000 acres over last year.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.
The University of Arkansas System Division of Agriculture offers all its Extension and Research programs to all eligible persons without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
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University of Arkansas System Division of Agriculture
Cooperative Extension Service