A Record 6 Million Acres of Corn May Go Unplanted Due to Extreme Weather

For months, traders debated which crops U.S. farmers would sow this year. That discussion is now turning to how many acres may be left unplanted as relentless rainfall sweeps the Midwest.

Rabobank is predicting an unprecedented number of unplanted acres of corn, the most widely grown American crop. A Bloomberg survey of 10 traders and analysts indicates growers could file insurance claims for about 6 million corn acres they haven’t been able to sow, almost double the record in 2013.

Corn futures surged more than 20% to a three-year high over the past few weeks on fears farmers wouldn’t be able to get seeds in the ground ahead of crop-insurance deadlines. So-called prevented plant claims reached 3.6 million acres in 2013, according to the U.S. Department of Agriculture’s Farm Service Agency.

Field conditions deteriorated over the past few weeks, indicating significant corn acreage loss was a risk, according to Gro Intelligence, a New York-based analysis firm that uses satellites among other data sources. Areas with the biggest risk of acreage loss were in central Illinois, Indiana and Ohio, and the region around the borders of South Dakota, Minnesota, Iowa, and Nebraska.

Such insurance claims are considered a last-ditch effort for farmers, who can receive about half of the value of their crop. Analysts in the Bloomberg survey cautioned estimates could still be skewed by the weather and the government’s market facilitation program, a $16 billion aid package to mitigate the impact of trade wars. Soaring corn prices could also prompt farmers to plant the crop without insurance.

“The MFP payment is dependent upon acres being planted,” said Karl Setzer, market analyst at Agrivisor in Bloomington, Illinois. Setzer estimated that 4 million to 5 million acres of corn could be left planted. However, “the recent rally in futures will also encourage planting beyond normal dates,” he said.

Sara Menker, chief executive officer of Gro Intelligence, said some areas could remain too wet to plant either corn or even soybeans. While the market is mostly focused on corn, traders “should probably care about corn and beans in particular areas, because both could be decimated, even with the window not closing for beans,” she said.

The top 25 counties at risk planted 3.7 million acres of corn in 2018, according to Gro Intelligence. In March, the USDA said U.S. farmers intended to plant 92.8 million acres of corn this year. The agency won’t report prevented plant until August.

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