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Costs, prices impact planting decisions
MISSISSIPPI STATE -- The cost of fertilizer and strong market prices are inspiring Mississippi growers to increase their soybean acreage in 2004.
Robert Martin, Sharkey and Issaquena county director for Mississippi State University's Extension Service, said growers see more potential in soybeans this year than they have in past years.
"A lot of growers are planting early soybeans, hoping to cash in on premium prices in August," Martin said. "Another big factor is that soybeans require less fertilizer than some of the other crops, especially corn. Fertilizer costs are tied closely to the price of fuel, so it's very expensive right now."
John Anderson, Extension agricultural economist, said at the end of March, prices on harvest-time soybean futures were running more than $2.50 per bushel better than last year. November beans were around $7.70 per bushel, compared to just over $5 in 2003.
"From a historical perspective, soybeans are posting excellent prices. When futures prices for next year's crop look this good, more growers will feel encouraged to plant soybeans this spring," Anderson said.
The U.S. Department of Agriculture's prospective plantings report released March 31 forecasts 1.65 million acres of soybeans in Mississippi, an increase of 15 percent. Last year, Mississippi growers harvested a record 39 bushels per acre, surpassing the previous record by 6 bushels.
"Corn prices are also attractive to growers, but fertilizer prices are moving more growers toward soybeans," Anderson said. "December corn futures prices are running near $3.30 per bushel compared to $2.40 at this time last year."
The USDA report predicts Mississippi growers will decrease their acreage to 450,000, down 18 percent. Last year, Mississippi growers harvested a record 135 bushels per acre, surpassing the previous record by 5 bushels.
"Cotton has been able to hold its own in spite of the high soybean prices. Harvest-time cotton futures prices are about 10 percent higher than last year at this time," Anderson said.
The prospective plantings report indicates Mississippi will plant 1.1 million acres of cotton, down just 1 percent. In 2003, growers harvested a record 925 pounds of lint per acre, which was 24 pounds more than the previous record.
Will McCarty, state leader for agriculture and natural resources for MSU's Extension Service, said the decline in cotton acreage simply reflects farmers' reactions to grain prices.
"A rain at the wrong time during planting season could cause that much of a difference. We are seeing more interest in soybeans because of the perception of less risk with higher prices and a lower cost to grow," McCarty said.
Anderson said last year's record yields may help farmers with cash flow issues this spring, but will not have much impact on planting decisions.
"Farmers don't look back as much as they look forward to the price and cost potential," Anderson said.
Mississippi is not alone in its interest in soybeans. The USDA predicts the largest national crop in history, rebounding from three years of decline. Total acres for cotton are also expected to be up 7 percent.
Mississippi's rice acreage is predicted at 235,000, unchanged from 2003. USDA expects the national rice crop to increase 8 percent.