Corn Price Dip Elevates Intended Cotton Acres

ROBERT NATHAN GREGORY 

STARKVILLE, MISSISSIPPI

Market corn prices are more than $2 lower per bushel than a year ago, so row crop producers in Mississippi are planning to plant less corn and more cotton in 2024.

Growers of the state’s three principal field crops – soybeans, corn and cotton – intend to plant 25% more cotton this year than they did in 2023 and 25% less corn, according to new data from the U.S. Department of Agriculture. Soybean production is forecasted to increase by 3%.

Will Maples, an agricultural economist with the Mississippi State University Extension Service, said one explanation for pivoting from corn was how much of it was planted last year – 94.6 million acres in the U.S.

“We started this year with high corn and tight soybean stocks, which led many to expect to see decreased corn and increased soybean acres in the report,” Maples said. “The amount of corn the U.S. planted led to a 2.172-billion-bushel carryover of stocks. This high level of stocks has weighed on corn prices, driving intended corn acres for 2024 down to 90 million.

“This is close to a bullish number for the market,” he added, “as it was on the low end of what many industry experts expected.”

The likely kicker, though, is declining profits. U.S. corn prices in February were $4.36 per bushel compared to $6.80 just 12 months before.

“The December 2024 corn futures contract has been trading at less than $4.80 per bushel since February 1 and hit $4.50 towards the end of February. While corn prices have trended back up since then, prices remain weak and make for tighter expected profit margins for producers,” Maples said. “With cotton prices over 80 cents currently, cotton has become very competitive with corn from a profitability standpoint.”

Though this price dynamic is leading more producers to consider cotton over corn this year, corn has one factor in its favor: weather.

“As we get into planting, any delays could lead to a nice price rally in corn,” Maples said.

Last year, growers planted 400,000 acres of cotton in Mississippi. Producers in the survey predicted planting about 500,000 acres in 2024. Corn, meanwhile, has a projected acreage of 590,000 this year compared to 790,000 acres in 2023.

Producers surveyed in Mississippi expect to plant 2.25 million acres of soybeans this year, which would be a 3% increase.

The USDA National Agricultural Statistics Service releases its annual prospective plantings report at the end of each March. Through surveys, farm operators in each state forecast during the first two weeks of March what they will plant in the upcoming season. The report averages the acreage estimates of soybeans, cotton, corn, rice, peanuts, hay and winter wheat.

Though not grown as widely in Mississippi as its three primary row crops, rice acreage is expected to increase 33% over 2023 from 121,000 acres to 161,000. Hay growers are forecasted to harvest 600,000 acres, up 20,000 acres from 2023. Winter wheat acreage is down 42% from last year to an estimated 70,000.

Rounding the report out, peanut producers said they would plant about 20,000 acres in 2024, up 11% from last year. ∆

ROBERT NATHAN GREGORY: Mississippi State University