In 2022, soybean planted acreage is estimated to increase 9% in the southern United States (U.S.) with a total planted acreage of 14.76 million acres. Southern states are estimated to account for about 16% of the total soybean acreage planted in the U.S. in 2022. Table 1 shows the past five-year history of soybean acreage by state. In 2022, Arkansas is expected to lead leads the southern states at 3.25 million acres, followed by Mississippi at 2.35 million acres. All southern states, except for Oklahoma and South Carolina, are expected to increase acreage in 2022, when compared to 2021. Soybean acreage in the south has substantially rebounded since 2019, when acreage was reduced due to low prices influenced by the US-China trade war. Soybean acreage across the south in 2022 is up 26 percent compared to 2019.
The observed increase in soybean acreage is influenced by a positive price outlook. On May 12th, USDA released their monthly World Agricultural Supply and Demand Estimate (WASDE) report. The May WASDE provided the first USDA projections for the 2022/23 marketing year for soybeans (and other crops). In this report, USDA projects the national average farm price for soybeans in 2022/23 to be $14.40/bushel. If realized, this price would match the record high achieved in 2012. The positive price outlook is supported by higher exports and domestic crushing on the demand side, compared to 2021. The supply side calls for higher production due to increased acreage, which increases estimated ending stocks to 310 million bushels. However, with a stocks-to-use ratio of 6.76 percent, the overall market environment is supportive of higher soybean prices.
Even with the positive price outlook, it’s important for producers to have a marketing plan in place to take advantage of the current high prices in the market. The new crop soybean Nov’22 futures has been trending higher since January 12th, with a closing price of $15.12/bushel as of May 25th. While prices are currently high, we continue to see considerable price volatility and producers should familiarize themselves with available tools to mitigate price risk. Available tools for price risk mitigation include forward cash sells on portions of expected production or hedging using the futures market. Another tool to consider is forward pricing with options which was covered in a recent Southern Ag Today article by Dr. John Robinson with an application to cotton markets (Forward Pricing with Options on ICE Cotton Futures – Southern Ag Today).
Table 1. Soybean Planted Acreage in U.S. Southern States, 2018-2022 (1,000 acres)
Maples, William E. . “Soybean Acreage Higher in Southern States with Increased Price Outlook“. Southern Ag Today 2(24.1). June 6, 2022. Permalink