WEST LAFAYETTE — Farmers will see less demand for crops in the midst of the coronavirus (COVID-19) pandemic, ag economists predict.
The anticipated hit in sales comes as ethanol plants shut down over the slide in oil prices and a drop in gasoline prices and the pandemic drives export forecasts lower.
With more plants expected to go offline, corn producers should expect demand for ethanol to drop sharply in the near future and likely remain weak until the economy recovers, said Jim Mintert, director of the Purdue Center for Commercial Agriculture. Between 35-40% of corn is used to produce ethanol.
“We’re cautiously optimistic that [demand may improve] this fall, but that doesn’t give us much help between now and the end of this crop year,” Mintert said Wednesday during an ag outlook webcast.
The U.S. Department of Agriculture had projected that 2019 corn exports would drop 16% from last year. But year-to-date sales and commitments through mid-March are down nearly 30%, economists say. Soybean exports are also unlikely to match the forecasts, according to Purdue.
For corn producers, the outlook is brightened by feed projections that are expected to be supported by record meat production. Economists say large livestock inventories will benefit soybean crush.
Despite the forecasted demands, U.S. producers say they intend to plant more corn and soybeans this spring than last year.
Prospective planting of corn was larger than expected, with farmers expected to plant 97 million acres, up 8% from last year, according to USDA figures released Tuesday. That would be the second largest corn acreage in the post-World War II era.
Soybean farmers say they expect to plant 83.5 million acres, a 10% increase from last year. The prospects were smaller than expected, but would still amount to the third-highest planted acreage on record.
The USDA’s report is based on a survey of about 80,000 farm operators across the nation.