Editor's Note: Steve Johnson is an Iowa State University Extension farm management specialist and a regular contributor to this Farm Management Friday column.
The much anticipated U.S. Prospective Plantings report was released at the end of March. The survey conducted by USDA stated:
Corn planted acreage planted for all purposes in 2015 is projected to be 89.2 million acres in the U.S., down 2% from last year. If realized, this will be the third consecutive year of an acreage decline and would be the lowest planted acreage in the U.S. since 2010.
Soybean planted acreage for 2015 is estimated at a record high 84.6 million acres, up 1% from last year. Compared with 2014, planted acreage intentions are up or unchanged in 21 of the 31 major producing states.
Wheat planted acreage (all wheat acres) for 2015 is estimated at 55.4 million acres, down 3% from last year. The 2015 winter wheat planted area, at 40.8 million acres, is down 4% from 2014, but up less than 1% from the previous estimate.
Report doesn't equal same number on June planted acreage
Let's take a look at the survey procedures used by USDA in gathering information for this March 31 Prospective Plantings report.
Survey procedures: This Prospective Plantings report was compiled by the USDA National Ag Statistics Service. This report does not equate to the exact number on the June planted acreage report to be released on June 30, 2015, or the final planted acreage report released in early January 2016. It should serve as an intentions of farm operators.
The acreage estimates for this report were based primarily on surveys conducted during the first two weeks of March 2015. The March Agricultural Survey is a probability survey that includes a sample of more than 84,000 farm operators selected from a list of producers that ensures all operations in the United States have a chance to be selected to respond to the survey.
These farm operators were contacted by mail, Internet, telephone, or personal interview to obtain information on crop acreage planned for the 2014 crop year. This includes more than 2,900 operators in Iowa.
Estimating procedures: The national, regional and state reported data from operators were reviewed by NASS for reasonableness and consistency with historical estimates. Each NASS regional field office submits their analysis of the current situation to the Agricultural Statistics Board. Survey data are compiled to the national level and are reviewed at this level independently of each state's review. Acreage estimates were then based on survey data and the historical relationship of official estimates to the survey data compiled for release on March 31.
Reliability of the prospective planting report: NASS self-reports the 20-year accuracy of its report estimates (page 34 of the Prospective Plantings report). For corn, the root mean square error for this 2015 report vs. final planted acreage is 1.9%, with a 90% confidence level at a 3.3% margin of error. That means on average the March report will be 1.174 million acres "off" from what operators end up actually planting. This means final planted acres could be this far above or below the 89.2 million acres estimated.
Over the past 20 years, the March Prospective Plantings report compared to the actual plantings for corn has been too low seven years and too high on 13 occasions than the January final acreage planted number.
For soybeans, the root mean square error for the 2015 report vs. final planted acreage is 2.1%, with a 90% confidence level at 3.6% margin of error. This means on average this March report will be 1.264 million acres "off" from what U.S. operators end up actually planting. This could mean that many planted acres above or below the 84.6 million acres estimated.
Over the past 20 years, the March Prospective Plantings report compared to the actual plantings for soybeans has been too low 11 years and too high on nine occasions than the January final acreage plantings.
Conclusion: Wait until June 30 report for next clue. This March 31 Prospective Plantings report does not equate to the exact June Planted Acreage report to be released on June 30 or to the final planted acreage report in early January 2016.
A major reason for having this annual Prospective Planting report is to let operators and agribusiness know what plans are for planting major crops nationwide. The futures markets adjust quickly to these acreage estimates and a great deal of price volatility can be expected this spring likely influenced by planting conditions and weather forecasts.
Operators reported intentions to plant 89.2 million acres of corn and 84.6 million acres of soybeans. That's 1.4 million less corn acres than was planted last year, but about 470,000 more than the average trade guess prior to the report's release. The decline in corn acres is mostly offset by increased planting intentions for other feed grains (barley, wheat, grain sorghum).
Soybean planted acres in 2015 would be 934,000 more acres than were planted in 2014, yet nearly 1.3 million less than the average trade guess. Planting intentions for other oilseed crops (canola, peanuts, and sunflowers) exceed last year's plantings by about 190,000 acres.
Attention will now turn to spring weather and planting progress. Excellent planting weather conditions in April and May can result in roughly up to 1 million acre swings from corn and soybean intentions. Wet and cold weather conditions can delay plantings far enough past the optimal corn planting date that some acreage may be switched to soybeans or another later planted crop.