Acreage Changes since Freedom to Farm

My recent Illinois Farm Economics: Facts and Opinions article documented changes in crop acreage changes in the United States since the 1995 Farm Bill. The 1995 Farm Bill, frequently called “Freedom to Farm”, eliminated most acreage constraints placed on farmers. Since “Freedom to Farm” passed, acreage changes likely reflect which crops farmers expect to be most profitable.

Between the early 1990s and late 2000s, soybeans increased by 14 million acres (24%) and corn increased by 9 million acres (14%). Hay and rice acreage remained relatively stable. The remaining crop with large acreages (over 1 million acres in 2008) had acreage declines. Wheat was the crop losing the most acres, having a decline of 12 million acres (19%). Crops losing over 1 million acres were barley, grain sorghum, corn for silage, and cotton. Peanuts, dry edible beans, potatoes, and sugarbeets had acreage declines of less than .5 million acres.

Most of the gains in soybean and corn acres occurred in the Midwest. North Dakota had the most increase in soybean and corn acres with a 4.2 million increase. Minnesota, Kansas, Nebraska, and South Dakota had increases of close to 3 million acres. Iowa, Missouri, and Illinois had increases over 1 million acres.

Several observations:

1. Much of the increase in soybean and corn acres was a substitution away from wheat. This switch likely is due to technological change in soybeans and corn relative to wheat. Between 1990 and 2009, national soybean and corn yields increased an average of 1.3% and 1.7% per year, respectively. In contrast, wheat yields only increased .6% per year. Biotechnology played a role, as there is a high adoption of biotech seeds for soybeans and corn. Wheat is not biotechnology altered.

2. Grain sorghum lost acreage. Since grain sorghum and corn are near substitutes, corn is likely substituting for grain sorghum. Again, technological change likely is the major influence of the switch away from grain sorghum. National grain sorghum yields averaged an increase of .5% per year compared to 1.7% for corn.

3. There is less diversity in crop grown in the United States. Of the crops having over one million acres in 2008, two grew in acres (soybeans and corn) while nine lost acres.

4. Biofuel uses have played a recent role in the increase in corn acres.

Evidence suggests that seed and genetic companies have placed much greater emphasis on developing soybean and corn seed rather than on the other crops. If this emphasis continues, soybean and corn technological gains may continue to outpace those of the other crops. This could then lead to continued gains in soybeans and corn acres. It appears that corn and soybeans are the crops that are increasingly relied upon to produce starches, proteins, and oils. The other crops will fill more of niche needs.