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Weekly Digest: More corn and soybean acreage but smaller hay area in 2021

Progressive Dairy Editor Dave Natzke Published on 31 March 2021

Digest Highlights

USDA: More corn and soybean acreage but smaller hay area in 2021

U.S. farmers intend to plant more corn and soybeans in 2021, according to the USDA’s Prospective Plantings report, released March 31. With acreage sacrificed for other crops, the area devoted to dry hay could be the smallest in 110 years.



Growers intend to plant 91.1 million acres of corn for all purposes in 2021, up less than 1% from last year. Soybean planted area at 87.6 million acres is up 5% from last year. The small increases in projected acreage was less than most private analysts forecast, sending Chicago Mercantile Exchange (CME) corn, soybean and soybean meal futures prices higher. Read: April Fools – 2021 Prospective Plantings from the American Farm Bureau Federation.

Meanwhile, U.S. producers intend to harvest 51.7 million acres of all hay in 2021, down 1% from 2020. If realized, this will represent the lowest total hay harvested area since 1908. Record-low all hay harvested area is expected in Connecticut, Maine, Minnesota, Rhode Island and Wisconsin. Meanwhile, Alaska and Montana are expecting record-high acreages.

The USDA also released quarterly Grain Stocks updates. Corn stocks in all positions on March 1 totaled 7.7 billion bushels, down 3% from March 1, 2020. About 4.04 billion bushels were stored on farms, down 9% from a year earlier. Soybeans stored in all positions totaled 1.56 billion bushels, down 31% from March 1, 2020. Soybean stocks stored on farms are estimated at 594 million bushels, down 41% from a year ago.

National Holstein Convention returning to in-person event

The 2021 National Holstein Convention will be an in-person event, scheduled for June 20-24 in Lancaster, Pennsylvania. Convention activities will take place at the Lancaster Marriott at Penn Square and Lancaster County Convention Center. The event will follow all site, local, state, and federal health and safety guidelines. Click here for more details about the convention schedule, tours and accommodations.

USDA buying 12.3 million pounds of cheese

The USDA’s Agricultural Marketing Service (AMS) awarded contracts for more than 12.3 million pounds of cheddar cheese for distribution in domestic feeding programs. The cheese, in 1- and 2-pound chunks and 2- and 6-pound packages of shreds, is scheduled for delivery between May 1-Sept. 30, 2021.


Contract awards went to Dairy Farmers of America (873,600 pounds), Great Lakes Cheese (3.14 million pounds), Masters Gallery Foods (7.72 million pounds), Schreiber Foods (529,200 pounds) and Winona Foods (38,400 pounds).

Dairy outlook updates

With USDA’s February preliminary Milk Production report and revisions to the January estimate, the U.S. is not only increasing milk production, but continued growth in cow numbers indicates there’s capacity for further growth, according to Mark Stephenson, director of dairy policy analysis, and Bob Cropp, dairy economics professor emeritus at the University of Wisconsin – Madison. Discussing the dairy situation and outlook in their monthly podcast, they warned those factors are likely to put continued pressure on marketing capacity and milk prices, and add to the importance of exports.

Dairy income margins are being stressed by higher feed prices. One positive is a pickup in sales through food service outlets as COVID-19 vaccinations increase and restaurant and school restrictions continue to ease.

Effective risk management continues to be essential for dairy farmers, even as price forecasts for 2021 have somewhat improved on robust domestic demand and at least some hope that milk production gains may be moderating, according to Peter Vitaliano, National Milk Producers Federation (NMPF) chief economist. For an overview of dairy market conditions, prices and more, check out the NMPF’s monthly Dairy Market Report.

PPP loan application deadline extended

The deadline to submit Paycheck Protection Program (PPP) loan applications has been extended until May 31. It will also allow the U.S. Small Business Administration (SBA) to process these applications through June 30. This does not mean, however, that the money will last through the end of May. Those still seeking a PPP loan should apply immediately, according to Kristine Tidgren, director of the Center for Agricultural Law & Taxation at Iowa State University.

The deadline extension follows a month of new PPP rules, Tidgren noted. The SBA previously issued its interim final rule to allow Schedule C filers, much like Schedule F filers, to use gross income rather than net income to calculate their PPP loan amounts. For more information, click here.


NMPF also provides additional information on PPP applications here. Producers who were denied a PPP loan in 2020 may now qualify if the new rules address the issue that caused the initial denial of their loan. In addition, borrowers who received their loans before SBA issued later rules and guidance may have received a smaller loan then they would under the new rules. For that reason, borrowers who have not yet had their loan forgiven can now ask their lender to evaluate their initial loan application against the new rules so that additional loan funds may be provided to make up any difference. Congress also has created a separate type of PPP loan with steeper qualification requirements for businesses that have received and spent their first PPP loan.

Things you might have missed

  • A bill providing banks with tax advantages similar to those offered to the Farm Credit System (FCS) has been introduced in the House. H.R. 1872, the Enhancing Credit Opportunities in Rural America (ECORA) Act, would exempt interest from taxable income on certain qualifying loans in rural areas. According to proponents of the bill, ECORA would remove the taxation on income from certain farm real estate loans that are made by financial institutions backed by the Federal Deposit Insurance Corporation (FDIC). The removal of this taxation would reduce banks’ costs to make farm real estate loans, providing farm customers with a more competitive market for interest rates.

  • Twenty-seven U.S. agricultural industry groups sent a letter to USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai expressing concern over several issues affecting the agricultural trade relationship between Mexico and the U.S. Those organizations signing the letter included the U.S. Dairy Export Council (USDEC), NMPF and International Dairy Foods Association (IDFA). Specific to dairy, the letter identifies Standards of Identity (SOI) Conformity Assessment Procedures (CAP) for cheese.

  • The Senate Ag Committee held a hearing to begin discussion on reauthorization of programs addressing child nutrition. In its comments to the committee, NMPF encouraged making participation in the National School Lunch, School Breakfast and Summer Food Service programs open to more children and youth, an expansion of grant funding to help schools afford equipment and other purchases that will empower them to further improve the quality, freshness and appeal of school meals. Highlighting the nutritional value of dairy products, NMPF called on the committee to address shortfalls in meeting dairy consumption recommendations contained in the Dietary Guidelines for Americans (DGA). NMPF also urged the addition of low-fat flavored milk to the menu of available products offered through school programs.  end mark
Dave Natzke
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