WEST LAFAYETTE, Ind. – Two Purdue University agricultural economists will crunch U.S. Department of Agriculture planting intentions data and share their insights during an online meeting from 7-9 p.m. March 31.

Chris Hurt and Corinne Alexander will discuss the USDA’s “Prospective Plantings” report and offer marketing strategies on the same day the report is issued. Online participants can ask questions electronically and view and print Hurt’s and Alexander’s PowerPoint presentation. The meeting will be conducted using Adobe Connect, a Web conferencing program.

To participate in the live online meeting or watch an archived version later, log onto https://gomeet.itap.purdue.edu/march31outlook. Some county offices of Purdue Extension also plan to host the live Webcast. For more information, contact a Purdue Extension office.

The annual “Prospective Plantings” report estimates how many acres of corn, soybeans, wheat and other crops American farmers expect to plant each year. Acreage projections are based on a survey the USDA conducts with farmers across the country.

“The report is the first indication of what farmers are actually going to plant this year,” Alexander said. Farmers and commodities traders pay close attention to the planting intentions report, she added.

“We expect the report to have a major impact on markets,” Alexander said. “If you think back over the last couple of years, we’ve seen major acreage swings on the order of millions of acres moving out of corn or soybeans, or back into corn and soybeans and wheat, as well. We’re expecting the same sort of massive acreage shifts this year.”

In the 2008 planting intentions report, the USDA estimated that the nation’s farmers would plant 86 million acres of corn, 74.8 million acres of soybeans and 63.8 million acres of wheat. Farmers eventually planted 85.9 million acres of corn, 75.7 million acres of soybeans and 63.1 million acres of wheat.

Large acreage shifts are likely this year, Alexander said.

“We at Purdue are estimating that corn acreage will be down nationwide by about 1 million acres, soybeans will be up by 6 million acres and wheat will be down by 4 million acres,” Alexander said.

Those interested in watching the Purdue online meeting should have DSL/high-speed Internet access. Computers must have Adobe Flash Player installed to receive the Adobe Connect program. A free plug-in download of Adobe Flash Player is available at http://www.adobe.com/products/flashplayer/

When logging in for the meeting, computer users should click “Enter as a Guest,” enter their name and then click the “Enter Room” button. Make sure computer speakers are plugged in and turned on to hear the presentation.

The 2009 USDA “Prospective Plantings” report can be accessed after 8:30 a.m. EST March 31 online at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1136

WEST LAFAYETTE, Ind. — A trio of economic factors that sent commodity prices soaring in mid-2008 has since reversed course and is pushing prices lower, according to an updated report by three Purdue University agricultural economists.

“The three major drivers that we identified last year were trends in global production and consumption, the value of the dollar, and biofuels,” said Wally Tyner, who, along with Philip Abbott and Chris Hurt, released “What’s Driving Food Prices?” this past July. “One of the key questions we asked in doing this new study was, ‘Are these same three that drove prices up the ladder now driving prices down the ladder?’ The answer is yes.”

Tyner and Hurt, who on Wednesday (March 11) present the update in a Farm Foundation Forum at the National Press Club in Washington, D.C., found that a stronger American dollar, falling ethanol demand and rising grain stocks combined to send corn, soybean, wheat and rice prices cascading in late 2008. Behind those dramatic changes is the global financial crisis, the economists said.

“The dollar had lost about 67 percent of its value through July 2008, and since July it has gained 22 percent of that value back,” Tyner said. “Since July, the expectations on supply and demand are that our stocks are going to be better than we thought since 2008 was a good production year and world demand has dropped. So supplies are not nearly as short now in terms of stocks-to-use ratios as they were before.

“And then the demand for biofuels is not near what we thought it was going to be. The price of oil comes down, the price of gas comes down and demand for ethanol goes down. That means there’s not as much corn needed to make ethanol, and, therefore, not near as much pressure on the price.”

Given time, consumers are likely to see lower prices for some food items, Tyner said.

“Demand is down for everything,” he said. “In particular, demand is down more for meat products, which means less demand for the corn and soybean meal to produce meat. It filters through the system.

“It takes a long time for some animal livestock products before those lower commodity prices get filtered into the meat, dairy and eggs. Poultry products are the quickest. For beef it’s the longest time period – up to several years – and for pork it’s somewhere in between. For some meat products, we may be seeing prices now that reflect more what corn and soybean prices were last year than what they are this year.”

Hurt said, “Some products like eggs, milk and dairy will have lower prices this year. Others like meats may be close to unchanged, and fruits and vegetables will likely still be somewhat higher.”

The news for crop farmers is not as rosy, however. Production costs have not fallen as quickly as commodity prices. As a result, input prices remain relatively high, Tyner said.

“Had commodity prices stayed high, farmers could have supported those input prices,” he said. “It’s going to be a tight margin year for farmers. They came off of two really good years, but this year is going to be much different.”

Hurt said, “The future for agriculture is also closely tied to the depth and duration of the current recession, as well as to the magnitude of the recovery in coming years. Other important factors will be how governments and consumers respond to the downturn and how biofuels policy evolves in coming years.”

To read the July 2008 “What’s Driving Food Prices?” report and update, go to the Farm Foundation Web site at http://www.farmfoundation.org.

Farm Foundation is a non-profit organization promoting non-advocacy agricultural policy analysis. The Oak Brook, Ill.-based organization provides objective information on issues shaping the future of agriculture, food systems and rural regions.