Growers are pretty predictable when it comes to deciding what it pays to plant.
At least that's what Harry Baumes of WEFA, an economic forecasting firm in Eddystone, PA, thinks.
The rule of thumb he goes by: When soybean prices are more than 2.4 times the price of corn, farmers will probably plant more soybeans than corn.
This season - with a soybean-to-corn price ratio of 2.4 to 2.5 - won't be an exception to the rule, says economist Baumes.
WEFA projects that U.S. corn acreage this year will be 79.33 million acres, down 1.47 million acres from the 80.8 million planted last year. While many forecasters predict higher soybean acreages in 1999, Baumes' firm expects growers to plant 72.1 million acres, 590,000 fewer than the record 72.69 million planted in '98.
The probability of this scenario? Sixty percent, depending on weather at planting.
It also depends on the prices of other crops, Baumes adds. The price of cotton hasn't increased as much as expected, and wheat prices have deteriorated.
The soybean-corn ratio can also vary from region to region, Baumes notes. Minnesota and Ohio growers, for example, need higher soybean prices before considering planting soybeans instead of corn.