The Rabobank Food & Agribusiness Research and Advisory group's report, "The Battle For Acres: U.S. Field Crops in Competition,” has concluded that in order to build U.S. and global supplies to acceptable levels, 237 million acres of corn, wheat, soybeans and cotton will need to be planted this year in the U.S.
The estimate represents an increase of 7 million over 2010’s total planted acres and an increase of 3 million over 2008’s record high of 234 million planted acres. Such numbers could lead to price volatility as producers determine how much of each crop to plant. "The consequence of the current competition among major crops, other principal crops and land uses, as well as historical precedence, is an intensely volatile environment which could drive prices to historical highs,” said co-author Sterling Liddell, vice president of FAR. “Global events are adding volatility on both the supply and demand side. Conditions are different this year from 2008, as all crops have rallied strongly in need of more U.S. production."
While profit margins favor corn over soybeans and wheat, according to the report the differential is not strong enough to drive significant substitution among the four major crops.