Kub's Den

In 1701, Jethro Tull invented the horse-drawn seed drill, used for evenly planting straight furrows of small grains in England, and later in Europe, America and the rest of the world. And here I was, thinking all along that "Jethro Tull" was just a progressive rock flautist!

There have long been some basic, human-operated devices for planting seed in furrows, used in India for many hundreds of years and in Europe as early as 1647. But it wasn't until Jethro Tull put some horsepower and some wheels into play that the Agricultural Revolution was really sparked. His controversial invention was more eagerly adopted in the New World than it was among his own countrymen, who were stubbornly accustomed to sowing their wheat seed by hand. But, eventually, the mechanized drill allowed the world's farmers to support a population explosion throughout the industrialized world.

Anyway, I think if Jethro Tull (not the band, but the real Jethro Tull, the 18th-century educated gentleman farmer from Berkshire) could see how unloved his world-altering invention is in 2017 on the Plains of America, he would spin in his grave. It's expected that Friday's Prospective Plantings report from USDA will show 2017's total wheat acreage down 3% from last year. Several industry participants weighed in on this shift in an article from DTN's Basis Analyst Mary Kennedy, "Spring Wheat, Durum Losing Ground": http://bit.ly/…

A 3% dip in acreage from one year to the next, on its own, doesn't sound like much. In total acreage terms, wheat is expected to lose 1.6 million acres compared to last year's crop. Variations in weather and yield trends could easily counteract that acreage loss by the time total production is counted. Even if we look strictly at the winter wheat crop, where planted acreage for the 2017 crop has already dropped 10% (to 32.4 ma) and harvested acreage could fall significantly more if dry fields in the Southern Plains are switched to row crops this spring, a 10% drop still isn't huge in the big scheme of things.

I looked at all the year-to-year acreage changes of the 10 biggest U.S. crops since the beginning of time (or at least since 1909, when nationwide acreage records started to be kept). There have been some whoppers. The most significant increase was soybean acreage gaining 63% from 1933 to 1934, when 5 ma were planted to soybeans. The biggest percentage drop came from sugarbeets in 1943, falling 41% to 619,000 acres, but perhaps oats dropping 39% to 12.4 ma in 1984 was a more significant change.

There are other examples from recent times that show how farmers have frequently reacted to market conditions more drastically than what we're seeing in 2017 wheat acreage. Grain sorghum (milo) acreage surged 1.8 ma to 8 ma in 2013, a 29% year-over-year acreage gain in response to corn's dismal performance in the previous drought year. Rice acres were up 20% in 2016, barley acres were up 43% in 2012, and cotton acres were up 34% in 2011 after gaining 20% the year before.

To see the real context of wheat's acreage losses, however, we need to consider a longer timespan than just looking one year to the next. This will be the fourth straight year of losses in winter wheat acreage, which is down 31% since 2008 (when it was 46.7 million) or down 42% since 1990 (56.7 million).

Futures traders will see USDA's surveyed responses from farmers about their spring wheat planting intentions in Friday's annual Prospective Plantings report -- and that crop, too, is expected to see an acreage drop that may not look too huge from one year to the next, but when seen in its larger context, is actually astounding. The average pre-report guess pegs spring wheat acreage at 11.3 ma, down 3% from last year. But there was a 22% acreage loss in the decade between 2006 and 2016 following about a 30% acreage loss in the decade before that. Since the crop's peak popularity in 1996, when 20 ma were planted, it's looking like 2017's spring wheat acreage will be 43% lower than that.

To understand why an increasing number of wheat drills are sitting unused in the Northern Plains of the United States and Canada, compare Jethro Tull's invention (pulled by tractors today, sure, but still mechanically similar) against the successfully widespread adoption of the corn planter. Together with herbicide-resistant seeds, over the past 20 years, the corn planter has allowed farmers to use no-till techniques and grow corn and soybeans in regions previously thought too dry for row-crop production, and today you'll find a lot of prairie farmers who prefer to plant corn and soybeans instead of wheat, just for the logistics of the situation (to say nothing of the price).

The corn planter was a late arrival on the scene, compared to the wheat drill, and for a long time in many areas of the U.S., corn seed was drilled. As early as 1834, there was a patent for a wheelbarrow-like corn-planting device, then other devices in the 1850s, ultimately evolving into the "corn jabbers" that were carried by humans and used to plant individual hills. Those were also known as "bill picks," a name that's easy to understand because the gadget works somewhat like a bird's bill. But I've always wondered why a seed drill was called a "drill." It turns out, it is just one of those quirks of British language. Jethro Tull himself wrote that his invention "was named a drill because when farmers used to sow their beans and peas into channels or furrows by hand, they called that action drilling."

It took him decades of losing money and tinkering with his design before the small grain seed drill really caught on. And then apparently, it took 300 years for it to fall out of favor. If Friday's all-wheat acreage number is anywhere below 48.7 ma (which it is expected to be), then that will be 45% below the wheat acreage peak of 88.2 ma in 1981 ... and this summer, America will have the fewest wheat fields it's ever had since USDA's acreage records began.

Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at elaine@masteringthegrainmarkets.com or on Twitter @elainekub.

(AG/BAS)

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