The third straight annual decline in US corn acreage may be good news for beer drinkers, as farmers seeking to offset lower prices turn to barley, sorghum and other crops.
Farmers anticipate planting 3.3 million acres of barley in 2015, a 9.5-per-cent jump from last year, the US Department of Agriculture said in its annual Survey of Planting Intentions. About two thirds of the nation’s barley crop is turned into malt, which can then be used to make beer and whiskey. More acres means a bigger supply, making prices for the ingredient lower than they otherwise would be.
The planting of oats, used in items such as General Mills’ Cheerios cereal, will increase 7.6 per cent to 2.9 million acres, according to the USDA.
Sorghum, sunflowers and flax also are gaining acreage as an alternative to corn, which has become less profitable to produce. Corn futures on the Chicago Board of Trade have tumbled about 26 per cent in the past year.
“Definitely, farmers are seeking cheaper alternatives to plant because of the uncertainty of corn,” said Jerry Gidel, chief feed-grain analyst for Rice Dairy in Chicago. “The cost of putting money into these small grains is cheaper than corn, and to some extent, soybeans,” the number-two US crop.
Favourable growing conditions pushed yields of both corn and soybeans to all-time highs last year.
Corn, still the nation’s largest crop, will be sowed on 89.2 million acres this year, down from 90.6 million last year, the least since 2010 and the third straight annual decline, according to the USDA report, which surveys farmers before the start of the growing season. Soybeans will be planted on a record 84.6 million acres, up 1.1 per cent from 83.7 million last year, the USDA said.
Bloomberg News, edited by ESM
