The USDA has released its annual update of 10-year Agricultural Projections and predicts that corn (maize) continues its reign as the largest crop in the U.S.
Looking ahead to 2018, USDA says it expects planted corn area to increase gradually from its current level of 36 million to 37 million hectares in response to increased domestic use, with a corresponding decline in planted area for both wheat and soybeans.
Ethanol production still drives the corn predictions, although USDA expects the demand pace to slow from recent rapid gains. The projections reflect only moderate expected increases in overall gasoline usage in the U.S.
Producers have been able to keep up with such demand for corn largely because hybrids and biotechnology traits have fueled remarkable yield increases and allowed corn production to move West into more arid regions taking planted area away from wheat (temperate crop land area in the U.S. is relatively constant). At the same time, producer returns from wheat are falling again. That reduces wheat's competitiveness for land relative to other crops and, USDA said, pushes expected U.S. wheat production below 25 million hectares over the ten-year period.
At the USW board meeting Feb. 9, president Alan Tracy discussed how wheat futures prices will reflect the balance or imbalance between demand growth and productivity.
"I wanted to show some indication whether or not we will see demand-driven prices for commodities by comparing the productivity growth of the three main temperate food crops against possible demand," Tracy says. "The story is mixed. Corn productivity is in good shape for now, but wheat needs some help from both biotechnology and higher prices relative to corn. A return to increased global trade and prosperity would also help boost prices."
USDA's annual projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.