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USDA ISSUES NEW 2008 PLANTED ACREAGE ESTIMATES
Farm Equipment magazine reports:

The USDA is forecasting that planted acreage for the top eight crops will increase by 6.8 million acres to 252.3 acres in 2008. Corn, soybeans and wheat acres are expected to total 225 million, an increase of 3.5% or 7 million acres compared with 2007.

Ann Duignan, an analyst with Bear Stearns, is attending the USDA 2008 Agricultural Outlook Forum in Arlington, Va., which concludes tomorrow, issued her "key takeaways" from the meeting so far.

2008/09 Planted Acreage Estimates. Corn 90MM; Beans 71MM; Wheat 64MM; Rice 18.5MM; Cotton 9.3MM. Takeaway: Major crop (corn, soybeans, and wheat) acreage will total 225MM, which is an increase of 7MM acres and +3.5% YoY. The planted acreage for the top eight crops is estimated to be 252.3MM (+6.8MM acres vs. prior year).

Inflation. The USDA expects food inflation to be 3% to 4%--higher than inflation on top of higher crop prices.

Exports. Exports are the story here, not just biofuels: Exports are expected to hit $101 billion in 2008 vs. $81.9 billion last year - up $32 billion in two years. The trade surplus is expected to be $24.5 billion in 2008 vs. $11.9 billion. Additionally, the U.S. is taking advantage of other government policy actions to reduce exports.

Largest Markets. Canada and Mexico are our biggest markets with China and Indonesia growing fastest. China imported $8.4 billion worth of goods last year up 300% YoY. As the value of exports rise, so too do farm values.

Major Crop Cash Receipts. The USDA provided its corn price estimate for 2008-09 of $4.60/bu. Using this, $10/bu for soybeans, and $8/bu for wheat, we calculate major crop receipts of $112 billion vs. $99 billion in 2007-08 (+13% YoY). For perspective, in the 2008-09 period the average soybean futures are $13.72/bu, and wheat futures are $9.48/bu.


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