USDA economists expect farmers to increase plantings of corn this spring while reducing their soybean production as the Trump administration's ongoing trade war with China remains unsettled.
USDA Chief Economist Rob Johansson, speaking at the department's 95th annual Agricultural Outlook Forum on Thursday, also forecast a record amount of meat and milk production in the year ahead but warned that the farm sector faced a good deal of uncertainty as growers prepare for planting.
"There are questions about trade, policy, weather, and market information, all of these have an impact of course on what farmers are planning to do this coming year," he said. "It makes the outlook less certain than perhaps since the first year of the Freedom to Farm Act in 1996."
On the crop side, producers are expected to plant 85 million acres of soybeans, a 4.7 percent drop from last year's production. Trade factors play a role in that decision, Johansson said, as producers react to the issues with China, a major export market for U.S. soybeans. Prices are expected to slightly increase, jumping 2.3 percent to an average of $8.80 per bushel.
Johansson said the current U.S. soybean carryout situation - up 472 million to a record 910 million bushels - will take years to unwind from a price perspective, potentially until 2020.
Some of those acres will be shifted to corn, as USDA anticipates a 3.3 percent increase in acreage to 92 million. Prices are expected to remain mostly flat, jumping about 1.4 percent for an average of $3.65 per bushel.
In the livestock sector, hog prices are expected to drop this year, taking a 7.5 percent year-over-year dip. Steer and broiler prices will be mostly stable - up 1.2 percent and down 0.8 percent, respectively - and milk prices are pegged for a 6.5 percent increase to $17.25 per hundredweight.
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