By Jesse Newman and Jacob Bunge 

ARLINGTON, Va. -- U.S. farmers this year are gearing up to sow more soybeans than ever before, betting on the oilseeds to keep them afloat as farm incomes drop for a fourth consecutive year, according to a new U.S. Department of Agriculture projection.

Farmers likely will expand soybean planting in 2017 by 5.5% to a record 88 million acres, USDA Chief Economist Robert Johansson said Thursday. Soybeans' land grab across the U.S. Farm Belt would come at the expense of corn and wheat acres, which are expected to decline from last year's totals.

Robust buying by China, the world's largest purchaser of soybeans, and steady demand from domestic processing plants are supporting soybean prices, making them more attractive to farmers this year.

"For the first time since 1983, there's a fair chance we'll plant more soybeans than corn," said Kurt Koester, president of Iowa-based brokerage AgriSource Inc. That year, farmers were paid to idle millions of corn acres to secure government subsidies designed to combat low crop prices.

The cream-colored legumes have grown from a niche crop raised on about 1.5 million acres in 1924 to nearly equal corn as the most widely grown agricultural commodity in the U.S. according to the USDA forecast. While corn prices gathered momentum after the U.S. established an ethanol mandate in 2005, soybean prices have proven more resilient after four straight years of grain and oilseed bumper crops filled farmers' bins and depressed prices globally.

Soybeans are widely fed to livestock and processed into everything from oil for deep-fat fryers to coolant for high-voltage transformers. Futures prices for soybeans traded on the Chicago Board of Trade rose 14% last year, while corn prices declined 2% and wheat slid 13%.

Better economic conditions around the world are expected to lead to increased overseas demand for U.S. agricultural commodities in general this year, according to Mr. Johansson, who spoke at an annual USDA conference in Arlington, Va.

But with their incomes expected to slide 9% this year, marking a fourth year of declines, farmers are searching for ways to boost profits and cut costs.

"With farmers' profit margins the tightest they've been in years, soybeans appear to be a small bright spot," said Mark Jensen, chief risk officer at Omaha, Neb.-based Farm Credit Services of America.

Concerns are also lingering that trade relations with key buyers of soybeans and other U.S. farm goods could sour under President Donald Trump. Mr. Trump, who on the campaign trail delivered blistering critiques of U.S. trade agreements, has bowed out of the Trans-Pacific Partnership and vowed to follow through on plans to renegotiate the North American Free Trade Agreement, which agricultural groups say has been key to boosting U.S. agricultural exports to Mexico and Canada.

"The U.S. has the most to lose of any sector when it comes to trade," said Luke Chandler, deputy chief economist for Deere & Co., at the USDA conference.

Soybean producers are among those in the farm sector who have pleaded with Mr. Trump to tread lightly on trade deals, for fear of disrupting the flow of U.S. supplies at a time when domestic stockpiles of the crop are expected to swell to the highest in a decade.

"I'm optimistic that new trade deals will focus on market access that will especially help rural America," said Iowa Gov. Terry Branstad, whom Mr. Trump has tapped to be the next U.S. ambassador to China.

Mr. Brandstad said he was confident the Trump administration would pursue export growth and work to eliminate barriers that countries like China have imposed against U.S. agricultural products.

In particular, Mr. Branstad said he hoped to see the removal of Chinese restrictions on U.S. beef as well as tariffs on imports of U.S. dried distillers' grains, an ethanol co-product used in animal feed. Earlier this month, an ethanol industry group said U.S. exports of the feed ingredient fell 10% last year amid a sharp drop-off in purchases by China.

Meanwhile, farmers are eschewing corn as they chase profits.

The USDA predicts growers will sow 90 million acres of corn this year, down from 94 million in 2016. The average price for a bushel of corn is forecast to rise to $3.50 a bushel, up 3% from the 2016-2017 season, the USDA said, though that is half of 2012's record levels.

Soybean futures prices fell after the USDA released its higher acreage projection, with March contracts settling 1.1% lower at $10.11 1/2 a bushel. Prices have declined about 4% over the past month but remain nearly 17% higher than a year ago, boosted by export prospects.

Write to Jesse Newman at jesse.newman@wsj.com and Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

February 23, 2017 17:46 ET (22:46 GMT)

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