The Agriculture Department recently released several tables previewing the annual long-term Agricultural Projections to 2028 (the complete projections will be released in February 2019). These early-release tables provide USDA’s estimates on the supply and demand for agricultural commodities for the next 10 years and take into consideration macroeconomic conditions, gross domestic product growth, population growth and farm policy, among other factors.
Given the current U.S.-China trade environment – U.S. Soybean Exports to China Fall Sharply –a key takeaway from these projections was the impact on soybean and other field crop acreage, soybean exports, soybean ending stocks and, finally, prices.
For the 2019 crop year, USDA projects soybean planted acreage will decline by 6.6 million acres, dropping from a record 89.1 million acres planted in 2018 to 82.5 million acres. If realized, this would be the third-largest acreage decline of all time and the largest year-over-year decline in soybean plantings since the beginning of the Renewable Fuels era in 2007. The decline in soybean acreage is anticipated given the slow pace of soybean exports, the dramatic decline in Chinese purchases, expectations for a nearly billion-bushel-carryout and projections for decade-low soybean marketing year average prices.