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    2020 Crop Year Predictions for Agribusiness Strategic Planning

    Posted by FMiD Team on Oct 30, 2019

    2020 Crop Year Predictions for Agribusiness Strategic Planning

    With the harvest season well underway, many agribusiness leaders are focused on farmers’ immediate needs. But another planting season will be here before we know it, and it’s time to start thinking ahead.

    Whether you’re planning budgets or revenue forecasts, trying to determine the products to focus your efforts toward, or investing in new markets to expand your overall footprint, predictive information about the 2020 crop season is crucial to making key business decisions.

    Our predictive data employs multivariate regression analysis and statistical models to analyze and project planting decisions for the 2020 crop year. It covers 208 million acres of corn, soybeans, wheat and cotton in 20 states, comprising nearly 70 percent of all agricultural production.

    Here are some of the insights we’ve gathered from our predictive data:

      2020 Predicted Acres
    (20 states)
    2019 In-Season Acres (20 states) % Change YOY
    Corn 71,832,753 80,961,323 -11.3%
    Soybeans 93,776,277 84,123,458 +11.5%
    Wheat 33,095,670 36,321,042 +8.9%
    Cotton 9,330,209 9,134,272 -2.1%

    It appears that the typical corn/soy rotation pattern will still be in full effect despite the lost corn acres this year, with corn production dropping to 72 million acres and soybeans rising to 94 million acres.

    This is happening despite the fact that 2019, a predicted corn-heavy year, saw a historic number of lost acres. Despite these losses, farmers on the whole seem to be sticking to their traditional rotation patterns, which will result in two back-to-back soy-heavy years.

    But while these aggregate figures can be helpful, they won’t provide the kind of insights that you need to make actionable decisions, such as:

    • Which geographies/territories should you prioritize?
    • Which farmers are the right fit for your business in 2020?
    • Which farmers should you avoid due to bad fit/hard times in 2020?

    That’s why we provide grower-level data that can be analyzed and segmented at a highly granular level, so you can get specific answers to specific questions. For the purpose of this article, we’re going to look at the question of geography: which geographies should you prioritize in 2020?

    One way to answer this question is to look at the growers based on the crop that they’re growing. Let’s say you only have enough resources to market and sell to fifty counties, then you may want to target based on which counties will have the highest number of corn and soybean growers.

    But there are other ways to approach this. In a zero-sum game economy, every dollar you spend is a dollar you must take from a competitor. That means that you’ll have the best chance of doing business when farmers are in the midst of significant change.

    Although the market on the whole seems to be sticking to traditional rotation patterns, individual farmers in specific geographies, particularly those impacted by bad weather, are likely to be considering change in 2020. So, it makes sense to go after the areas where there are going to be drops (or increases) in corn or soybean production beyond the national average (-11.3% for corn, +11.5% for soybeans, and +0.3% for both), as an extraordinary deviation from the national average likely indicates that something is different in that particular geography. 

    State Corn Production Compared to National Average Soybean Production Compared to National Average Corn/Soy Production Compared to National Average
    Arkansas -46.1% +8.4% +14.8%
    Illinois +12.7% -12.3% -12.4%
    Indiana -19.0% +25.8% +0.1%
    Iowa +4.0% -15.8% -0.7%
    Kansas +19.4% -18.1% -6.4%
    Kentucky +3.4% -2.9% +0.3%
    Michigan -18.3% +26.7% +11.9%
    Minnesota +18.5% -20.7% -2.1%
    Mississippi -60.5% +11.8% +14.0%
    Missouri -14.7% +1.8% +2.6%
    Nebraska +0.3% -7.4% -6.5%
    North Carolina -31.2% +6.8% +0.2%
    North Dakota -28.1% +2.0% +0.4%
    Ohio -43.2% +46.8% +11.3%
    Oklahoma -28.6% +10.7% -19.1%
    South Dakota +7.6% +41.0% +17.2%
    Wisconsin -3.4% -26.5% -15.1%

    Of course, since we’re talking about geography here, let’s look at this data on a map. For the purposes of this visualization, we’re considering fluctuations of > +5% to be above the national average, +/- 5% to be at the national average, and < -5% to be below the national average.

    2020 Predicted Corn Acres

    2020 Predicted Corn Acres

     

    Soybean variations, on the other hand, look at lot different for 2020.

    2020 Predicted Soybean Acres

    2020 Predicted Soybean Acres

     

    Given that there are 22 million more soybean acres in 2020 than corn, it makes sense that more states will exceed the national average in terms of soybean production. 

    Of course, while the overall Corn/Soy market is barely shifting, there are areas that are seeing more changes in production than what we’ll consider in the national average.

    2020 Predicted Corn/Soy Acres

    2020 Predicted Corn/Soy Acres

     

    In this case, we looked at the state level, but with our grower and field-level data that powers this analysis, we can look at a county-by-county or territory-by-territory level.

    These illustrations are highly generalized and demonstrate only a fraction of the capability that comes with data analysis. Once you know what the farmers are growing in 2020, you can create more highly specific segments based on:

    • Financial information like Gross Farm Income and spend potential
    • Real estate data (deed, mortgage, tax assessor)
    • Consumer demographics (age, gender, # of adults in household, etc.)
    • Relationships to other growers (household, business, subsidy payments, and other relationships)
    • And much more

    Once you’ve identified those prime opportunities and defined your market, the next step is to engage in targeted outreach to those specific growers. That’s where our predictive data can provide tangible value to your agribusiness. 

    Let us help you figure out the right segments of growers to go after, and give you the tools you need to have an effective revenue strategy in 2020.