Farmers are expected to increase corn plantings next spring to about 93.5 million acres, the fourth-highest total in the past 73 years, as tight stockpiles keep grain prices near the record levels reached earlier this year, CF Industries Holdings Chief Executive Officer Stephen Wilson told analysts this week.
Farmers are “flush with cash” as the fall harvest nears completion, and corn, above $6 a bushel, is fueling a record agriculture income boom, Wilson said. That boom has resulted in strong orders for ammonia and other nitrogen-based fertilizers that will be used to grow next year’s crop, Wilson added. “Corn economics are very attractive for farmers,” Wilson said. CF Industries’ corn acreage estimate is based partly on internal analysis, including fertilizer orders placed by its wholesale distributor and crop nutrient retailer customers. Seedings at 93.5 million acres would be up 1.7 percent from 2011 and would be the highest planted acreage since the end of World War II, according to USDA.
Wilson does not “see much risk” for an extended slide in corn prices. “If prices were to fall further, more feed and export demand would develop,” Wilson predicted. “This would drive stocks to an even more unsustainably low level.” Corn acreage at an estimated 93.5 million acres next year would trail only 1944, 1943, and 2007 as the highest amount planted since 1939, according to USDA. In 1932, corn farmers planted 113 million acres, the all-time high, although that crop generated just 2.6 billion bushels at an average yield of 26.5 bushels an acre.
The ammonia fertilizer CF Industries sold to customers averaged $552 per ton during the third quarter, up 40 percent from $394 during the same period a year earlier, the company said.
