The USDA revealed at its Ag Outlook Forum that U.S. farmers plan to cut corn acres by 4.8 million in 2026, dropping to just 94 million after last year’s record 98.8 million. This marks one of the largest single-year reductions in decades. Farmers cite rotation needs after back-to-back corn crops, heavy carryover stocks, and stronger soybean economics.
Corn futures reacted positively today, holding steady around $4.30 to $4.37 with analysts noting a mildly bullish tone. The acreage cut signals supply discipline at a moment when global corn stocks outside the United States sit at their lowest stocks-to-use ratio since the early 1980s. Argentina, Brazil, and Ukraine combined face tight supplies. Lower U.S. production, forecast at 15.8 billion bushels (down 7 percent from 2025), combined with steady ethanol and export demand, could finally begin to erode the large domestic surplus.
Those missing corn acres will not disappear. USDA expects most to shift into soybeans, with bean plantings rising to 85 million acres, an increase of nearly 4 million. The current corn-to-soy price ratio hovers near 2.5 to 1, a level where soybeans often win the acreage battle. Farmers also value the agronomic benefits of rotating after consecutive corn years.
The China trade situation adds major uncertainty. Ongoing talks show some positive signals, including additional purchase commitments mentioned earlier this year. President Trump and President Xi are expected to meet in April. However, nothing is finalized, and Brazil continues to capture more market share with its record crops. If the China deal stalls or collapses, the extra soybean acres could flood the market without sufficient export outlets. Soybean basis and futures would likely weaken sharply, while corn prices, supported by tighter supplies, could remain more resilient.
In either scenario, a strong biofuels policy delivers the strongest support for the agricultural economy. Year-round nationwide E15 access would increase ethanol demand by more than 2 billion bushels of corn annually with no additional taxpayer cost. The 45Z Clean Fuel Production Credit provides direct incentives for refiners to blend more biofuels, boosting demand for both corn-based ethanol and soybean oil used in renewable diesel. USDA Chief Economist Justin Benavidez emphasized at the Outlook Forum that biofuels policy stands as one of the most powerful demand levers for 2026.
Early signs point to a potential turnaround for the sector. USDA forecasts show net cash farm income rising modestly in 2026 even as headline net farm income dips slightly. Production costs continue to moderate, crop prices project slightly higher than recent lows ($4.33 corn and $10.30 soybeans), and global demand for U.S. corn holds firmer than many expected. The row-crop sector faces ongoing challenges, but acreage discipline, tighter world supplies, and policy-supported domestic demand create a clearer path toward recovery.
Producers face a critical spring decision. The projected 5-million-acre corn reduction provides near-term price support. Shifting heavily to soybeans appears attractive today, but export risks tied to China remain high. Regardless of the final corn-soy split, aggressive implementation of year-round E15 and full 45Z credits ensures more bushels find high-value demand at the pump.
American agriculture does not need to pick winners between corn and soybeans. With robust biofuels policy, both crops can contribute to a stronger rural economy. AgroWars will track planting intentions, trade updates, and biofuels developments through the March Prospective Plantings report. The battle for acres has begun.