Given the long-term price projections for grain and oilseed prices, there definitely could be more acres of cropland dedicated to hay and alfalfa in future years, projected Joe Outlaw with Texas A&M University.
"One reason, we are going to have more hay acres: land once dedicated to CRP acres (Conservation Reserve Program) is going back into crop production," said Outlaw. "In the current farm bill, CRP acreage will drop from 32 to 24 million acres. Much of that is marginal land suited for hay," Outlaw told those attending the 41st Southern Dairy Conference in Atlanta, Ga., on January 20.
"The other factor is that crop insurance program payments are tied to a land parcel's base acres," noted Outlaw. "In addition to more hay coming from former CRP acreage, we could see more hay on land previously in wheat," said Outlaw. "So, even if land didn't have wheat planted on it in any given year, a payment will be issued during low margins if the land had wheat (or any other crop) planted on it over the last five years. That being the case, we will see crop farmers switch back and forth between the 21 crops covered by USDA programs," predicted Outlaw.
"While less corn acreage may also be on the horizon due to returns on that crop, most of that land will go towards soybeans."
One final trend was noted by Outlaw, "Base payments on the crop program are based on a five-year Olympic average. That means payments related to USDA's crop program will drop significantly from 2014 to 2018 given long-term price forecasts. Given that scenario, we could see much more movement between crop plantings."
(c) Hoard's Dairyman Intel 2015
January 26, 2015
