Corn and cotton will be big winners of the US plantings war this season, but the crop's growing popularity will take its toll on prices, the American Farm Bureau Federation said.
American growers will sow 90m acres of corn sowings in 2010, 3.6m acres more than last year, as hopes for a revival in demand from ethanol plants, and potentially from livestock farmers too, improves the attractions of the crop.
"Feeding numbers may rise as livestock require additional calories to weather a frigid winter," federation economist Terry Francl said.
Cotton plantings will rise by 860,000 acres to 10.0m acres, encouraged by the rebound of more than 50% in prices last year.
"As a result of reduced US production and strong global demand focused in China, prices have recovered nicely," he said.
Price slides
However, the increases - which would put corn on course for a record 13.5bn-bushel-harvest - may help undermine prices, he added.
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In demand - corn, cotton prospects, 2010-11 (year-on-year change)
Corn sowings: 90.0m acres (+4.2%)
Corn production: 13.53bn bushels (+4.7%)
Cotton sowings: 10.0m acres (+9.4%)
Cotton production: (+22%)
Source: American Farm Bureau Federation |
Corn, which was trading at $4.20 a bushel in Chicago on Monday for March delivery, would fall to about $3.75 a bushel assuming more normal autumn conditions, following this year's rain-plagued harvest.
Cotton prices may tumble some 25% from Monday's 73.88 cents a pound.
"Strong US and world crops could chase prices back into the mid-50 cent-per-pound range," Mr Francl said.
Wheat may fall to $4.75 a tonne despite a slide in American plantings, as huge supplies in many regions undermine pricing power.
"We've got wheat, wheat, wheat everywhere," he said.
'Line must be drawn'
The comments came to the federation's conference, where president Bob Stallman promised a tough stance against critics of cutting-edge farming practices and technology.
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Out of favour - soy, wheat forecasts, 2010-11 (year-on-year change)
Soybean sowings: 90.0m acres (-0.6%)
Soybean production: 3.31bn bushels (+5.3%)
Wheat sowings: 55.0m acres (-6.9%)
Wheat production: (-7.1%)
Source: American Farm Bureau Federation |
"A line must be drawn between our polite and respectful engagement with consumers and how we must aggressively respond to extremists who want to drag agriculture back to the day of 40 acres and a mule," said Stallman.
Indeed, Christopher Horner, a fellow at the Competitive Enterprise Institute, cast doubt on the climate change agenda behind much of the pressure for changes to farming.
A "careful" assessment of data showed there had been a "slight decline" in temperatures since 2001.
And the data itself was of questionable reliability, given that it was focused on urban areas in Europe and the US.
"The resultant evidence shows an 'urban heat island' effect, not a comprehensive portrait of the subject," Mr Horner said.