When USDA was tasked with creating a trade aid package for farmers they were confronted with a unique challenge: Mother Nature has caused corn planting to be historically late. Because of that, it was important to the agency that the program not influence planting decisions.
As a result, many of the details were left out of the program announcement on Thursday, creating confusion for farmers.
“Right now, it looks like for the most part they're trying to keep it from affecting this year's planting decisions,” Jim McCormick of AgMarket.net told AgDay host Clinton Griffiths. “They're trying not make it so we're going to overwhelm the bean market, because that was the biggest fear. There was a lot of rhetoric, [such as] they're getting $2 a bushel, and that was just going to encourage producers to essentially move away from corn and plant the beans.”
An influx of soybean acres is the last thing the already struggling market needs given the stock levels, according to McCormick. While he admits trying to decouple the program from planting decisions was the right move, he says it’s made things more confusing.
“The fact of the matter is, there's a lot of confusion out there right now. I mean, it'd been nice if they had given us the full data,” he said. “It's going to be tough on producers to make these economic decisions.”
Producers should continue with their previous plans despite Thursday’s announcement, McCormick said.
“My best advice is do what you do. If you're going to plant corn, plant corn, if you're going to plant beans, plant beans and fight it,” he said. “Fight to get that crop in. I know there's a lot of uneasiness. The fact of the matter is you are producers, that's what you do for a living, produce a crop.”
The corn crop appears to be trending smaller because there’s still so many acres under water, which could fuel a bull market.
“If you are able to produce a crop in the corn, my guess is you're going to be very, very rewarded financially when it's all said and done,” he said. “The prices will go a lot higher.”