Corn and cotton acres down; soybean and rice up

A global health crisis and its economic impacts, unusually wet weather and an ongoing trade

dispute with China have had a discouraging effect on Arkansas farmers’ acreage decisions for

some key crops in 2020.

The 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.

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.”

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.

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.”


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