Iowa Cutting Back on Corn Production

Coming off a year when they planted more corn than at any time since 1944, farmers in Iowa and across the nation expect to plant fewer acres of the golden grain this year.

The U.S. Department of Agriculture on Monday said Iowa farmers expect to plant 13.2 million acres of corn this year, down 7 percent from the 14.2 million acres planted in 2007.

Nationally, corn farmers are expected to plant 86 million acres of corn, down 8 percent from the 93.6 million acres planted in 2007, according the USDA, which based its report on surveys of 86,000 farm operators in the first two weeks of March.

Corn prices have been running above $5 per bushel at Eastern Iowa elevators.

The decreased supply could drive corn prices even higher — a cost for food producers that could translate into higher prices for consumers.

Terry Francl, a senior economist for the American Farm Bureau Federation, predicted Monday that corn prices will continue to rise but says consumers shouldn’t panic just yet.

Many farmers will take a look at the report and decide to plant corn instead of other crops, he said, and weather conditions also could change things.

"We’re going to have to wait until we go through the spring planting season," he said.

Demand for corn from the burgeoning ethanol industry has been blamed for driving up the price of corn in the last couple of years.

Though the ethanol industry is heavily subsidized and has contributed to the rise in prices, a decrease in corn production could hurt that business, too. Higher prices for the crop could be passed on to those filling their cars up with the renewable fuel.

The USDA says corn planting is expected to remain at historically high levels but could be down this year because of the high expense of growing corn and favorable prices for other crops, such as soybeans.

Nationally, many farmers are making the switch to soybeans, according to the USDA, which is projecting a total of 74.8 million bushels of beans, up 18 percent from 63.6 million acres in 2007.

Iowa soybean farmers are expecting to plant 9.8 million acres of beans this year, up 15 percent from the 8.55 million bushels they planted in 2007.

Soybeans are fetching about $11.50 per bushel at Eastern Iowa elevators.

John Hoffman, a soybean grower from Waterloo and president of the American Soybean Association, said farmers will always find ways to grow more crops to stabilize prices. Though high prices are good for the farmers, there’s bound to be a correction, he said.

"There’s an old saying out on the farm that the cure for high prices is high prices," Hoffman said.