Fate of 4 million “ghost acres” mysteriously missing from March Prospective Plantings Report
Amid all the post-report hoopla regarding unexpectedly high planting intentions for corn, the bigger than expected drop in planned soybeans and the lowest wheat acreage since USDA began records in 1919, the elephant in the living room is the fate of 4 million acres that farmers seemingly won’t plant to anything – which is highly unlikely. Total intended acreage of all principle crops came in at 315.3 million acres, down 4.2 million from total acres in those crops last year. I call them “ghost” acres.
Take a look at Fig. 1, a history of USDA’s March Prospective Plantings report versus its June Acreage Report on what actually got planted. Notice the 4 million-acre decline in total intended acreage for 2019 is the 2nd largest drop since 2001, surpassed only by the 2009 drop of just over 6 million acres.
In the aftermath of release on March 29, of the few analysts who even took note of the 4 million “ghost” acres, most brushed it off with something to the effect, “Well, we’ll find out in June what got planted on those acres; most likely hay.” But that’s inadequate on several counts. Take a look again at Fig. 1 at the years highlighted by red arrows; those five years where total prospective plantings (blue bars) of principle crops dropped 3.5 million acres or more. Now compare what showed up as actual planted acreage in USDA’s June Acreage report (gold bars). These facts jump out:
* Of four prior years with a drop of 3.5 million acres or more, only one (2016-17) showed substantial “shrinkage” of ghost acres by about 70%.
* In 2006-07, the “ghost” acres barely shrank at all from March Prospective Plantings.
* In the remaining 2 years, “ghost” acres actually ROSE substantially from March intentions – by nearly 2 million acres in 2001-02 and about 1.6 million in 2009-10.
Next, I want to challenge the assumption that most of the ghost acres for this year will end up in hay. For one thing, the report itself says farmers intend to harvest just 251,000 more hay acres this year versus last, just 6% of the “missing” acres. So that still leaves just under 4 million unaccounted for.
Second, while true that on average June reports show increased hay acreage accounting for 80% of ghost acres “missing” from Prospective Plantings, Fig. 2 shows w-i-d-e variation from year to year in how much traders can count on March “ghost acres” winding up as increased harvested hay acreage; from none at all to 166% of them, as happened in 2016-17.
BOTTOM LINE: Even if USDA’s June 2019 ACREAGE report shows “average” offset of March “ghost acres” by extra hay acres, we’ll be left with 2.36 million acres in potential “surprise” acreage showing up for other crops!
Dan Manternach, President
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