USDA is being optimistic at best for 2008 planting expectations

Implications: The USDA's most recent projections on planted area for corn, soy and wheat in the US for 2008 appear to be optimistic at best.

Analysis: Darrell Good of the Univ. of IL does a nice job of taking a critical look at the most recent report from the USDA on their expectations for planted area for corn, wheat and soybeans in the US in 2008. 

USDA has indicated they expect US farmers to increase planted area for these crops by 7.4 million acres, with the growth coming from,according the Dr. Good,
> Reduced cotton plantings (1.1M acres)
> Increased double cropping of soybeans after wheat (2M acres)
> Land coming out of the Conservation Reserve Program (2.5M acres).

Here are three issues to consider. 

First, double cropped soybeans are not nearly the same as first crop soybeans.  The success of planting soybeans following the wheat harvest in June or July is driven by location (in IL, south of I70, it's a good risk, but north of I72 and your odds are better in Vegas) and weather (is it going to rain a lot in July?).  It would seem to be wise that if USDA is pumping up their total soy area with 2M double crop acres, some reduction in average yield would be wise.

Secondly, the 2.5M acres coming out of the CRP program has a similar problem.  Farmers typically don't idle their top-producing land in the CRP program and a great deal of the acres in this program are in fact, much better off never being farmed.  So even the "best land" coming out of CRP will likely be at the bottom on typical yields, regardless of what crop is being produced.  Interestingly though, the USDA is projecting corn yields next year up 3.8 bushels per acre from 2007, which would be a four-year high. 

Last problem is a bit more glaring.  There are another 1.8M of "new" acres that can't be explained.  Is there some cerrado somewhere in the US that farmers are busy clearing for planting in a few months?  Is  pasture being plowed up in preparation for corn or bean planting? 

Or are the USDA's planting expectations a bit on the optimistic side?