A look at total crop acreage
But we still get back to the question of what happens to these acres. Crop prices may fall far enough so that revenue does not cover all production costs. But in the short term that is probably not enough to convince farmers to leave the land idle. Landowners have to make land payments, pay real estate taxes and other fixed costs whether they grow a crop or not. So farmers will continue to plant if revenue covers out of pocket costs and at least part of these fixed costs. Renters need money to pay the cash rent as well as the operating costs for fertilizer, seed, etc. But the demand for land to rent is competitive and if a renter decides to give up the land for a year and not plant a crop - someone else will step up. Prices for crop insurance will be set in February and it appears that the corn price will be near $4.50 per bushel and the soybean price will be above $11 per bushel. These prices are probably high enough to keep farmers from leaving the land stand idle.
The conclusion from this analysis is that we could see an increase in total crop acreage in 2014 even with the lower crop prices. We probably won’t see the kind of decline in corn acreage that we would need for production to match up with expected demand. With trend yields next year, corn stockpiles could get pretty burdensome.