DES MOINES, Iowa -- The U.S. Department of Agriculture shocked farmers, grain analysts and market traders Friday with a report that shows no reduction in the number of acres planted in corn, despite a soggy spring.
The annual June acreage report, based on interviews with thousands of farmers and compared with March's planting intentions report, is viewed as an accurate indication of what has been planted and provides a gauge of how the crop season is progressing.
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Three months ago, farmers were expected to plant 97.3 million acres and harvest 89.5 million acres. It was widely expected that the cold and wet Midwest spring -- including Iowa, the nation's leading corn producer -- would cut corn acres by 2 million or 3 million acres.
But Friday's USDA report showed planted corn acres rose slightly to 97.4 million and said farmers would harvest 89.1 million acres. Turns out Michigan, Nebraska and Texas planted more of the crop than expected, offsetting some of the acreage -- about 300,000 in some places -- lost to puddles in Iowa, Kansas, Minnesota and Wisconsin.
"I am shocked by that," said Chad Hart, an agriculture economist with Iowa State University. "In my five years in this job that corn planted number is the most surprising number I've ever seen."
Many met the report with skepticism.
"A lot of corn was replanted which means the yield will be maybe 80 percent of what it would have been if they hadn't had to replant so I have a lot of trouble with the USDA's final production bushel estimate," said 74-year-old Jerry Main, who plants corn and soybeans on about 500 acres near Fairfield in southeast Iowa.
He said many farmers had a window to plant around May 24 but then weather turned cold and it rained for nearly a week straight.
"The stuff just rotted in the ground," Main said. He still has standing water in some of his fields.
The USDA said Iowa farmers planted about 200,000 fewer acres in corn than expected in March, a figure Main believes is considerably underestimated.
Elsewhere, Kansas was down about 100,000 acres, Minnesota about 300,000, and Wisconsin 150,000. Farmers in other states, however, will more than make up the difference, the report showed, with Nebraska and Texas reporting 300,000 acres more than expected and Michigan showing 200,000 acres more.
Corn prices fell rapidly as the report was released, because it indicated more corn than expected would be available on the market -- possibly a record 13.9 billion bushels of corn come harvest.
"Expectations were so strong that we were going to see a reduction in the planted corn acres today that this is definitely a bearish surprise," Todd Hultman, a grain analyst for Omaha-based DTN, which provides farm market data. "It means we have increased supplies coming this fall."
When supplies are high for a commodity, prices generally are lower. A lower price for corn is good news for those who raise cattle, hogs and poultry and use corn as feed. It also improves profitability for the ethanol industry.
But lower prices mean lower profits for farmers who will sell their grain at harvest. Corn for delivery in December fell 24 cents to $5.14. Last year during the drought, corn prices hit records highs exceeding $8 a bushel.
"I would say I'm moderately concerned," Main said. "I frankly will be surprised if we don't see an improvement in the market before fall. We have a long ways to go and a lot of things can happen yet but after that fall today we're going to need some rebound in corn prices to make it work."