IBJNews

History points to worse-than-expected year for crops

Back to TopCommentsE-mailPrintBookmark and Share

U.S. corn farmers, who've been hurt by the worst drought in a generation, are likely to harvest smaller crops than the government forecast this month, based an analysis of dry spells in the past 42 years.

In the five drought years since 1970, farmers on average harvested 85.4 percent of the acres planted, U.S. Department of Agriculture data show. That’s below the 90.6 percent that the USDA predicted for this year on Aug. 10, when the agency cut its output forecast by 17 percent following the hottest July since 1936. The annual Professional Farmers of America survey of more than 2,000 fields in seven Midwest states starts Monday.

Moderate to exceptional drought conditions covered 51 percent of the nine-state Midwest region as of Aug. 14, compared with less than 1 percent a year earlier, government data show. Corn and soybean crop conditions are the worst since the last drought in 1988, according to the USDA. Corn futures have surged 60 percent since mid-July, boosting the cost of making livestock feed, ethanol and food products.

“In a year like this, the only yield surprises are to the downside,” said Michael Cordonnier, the president of Soybean & Corn Advisor Inc. in Hinsdale, Ill., who sampled crops in eight states from Nebraska to Ohio during the week ended Aug. 3. “The number of acres harvested this year will fall.”

The USDA, which in July predicted a record corn crop after farmers planted the most acres since 1937, cut its forecast to 10.779 billion bushels, down 13 percent from 12.358 billion last year. The soybean forecast was reduced 12 percent, to 2.692 billion bushels, down from 3.141 billion in 2011.

U.S. corn harvests were below normal during the drought years of 1974, 1976, 1980, 1983 and 1988, USDA data show. On average, farmers have collected 89.2 percent of the planted acres since 1970.

Cordonnier said the USDA will have to cut its corn estimate by an additional 5.3 percent and soybeans by 2.3 percent. Output from the United States, the world’s largest grower and exporter of both crops in 2011, will drop for a third straight year. The USDA will next update its forecasts on Sept. 12.

“It’s a catastrophe,” said John Cory, the chief executive officer of Rochester, Ind.-based grain processor Prairie Mills Products LLC. Cory, who predicted in July that corn output would fall below 11 billion bushels, now expects a harvest as low as 9.5 billion bushels. He said the soy harvest may fall below 2.5 billion bushels.

After the worst U.S. drought since 1956, corn plants that farmers will begin harvesting next month are maturing three times faster than the five-year average, and the rate of pod development by soybeans is 19 percent above normal, USDA data show. Rapid development cuts yield potential and reduces the benefits of rains the past two weeks, Cory said.

The 20th annual Pro Farmer tour will include about 120 grain buyers, analysts, traders and farmers as crop scouts to survey fields in Ohio, Indiana, Illinois, Iowa, Nebraska, South Dakota and Minnesota. Corn-yield estimates and soybean-pod counts will be reported daily and then incorporated into a national crop forecast by Pro Farmer on Aug. 24.

“The heat was the big problem this year for corn pollination,” when kernels were forming on cobs in July, said Kevin Rempp, 54, who farms about 1,200 acres of corn and soybeans with his father near Monetzuma, Iowa. Rempp predicted corn yields in Iowa, the biggest U.S. producer, will drop 30 percent from last year and soybeans will be 10 percent to 20 percent lower. “I have farmed for more than 35 years, and this crop is the hardest to predict because yields are extremely variable across each field.”

Corn futures for December delivery rose 0.5 percent, to $8.11 a bushel, Monday morning on the Chicago Board of Trade. The price reached an all-time high of $8.49 on Aug. 10. Soybean futures for November delivery advanced 0.7 percent, to $16.57 a bushel. The most-active contract reached a record $16.91 on July 23.

Drought has affected 87 percent of U.S. corn, 85 percent of soybeans, 63 percent of hay and 72 percent of cattle, the National Climatic Data Center said Aug. 16.

Increased rain from South Dakota to Ohio and cooler weather than the record-setting heat of July will reduce the chances for additional cuts in the government’s corn forecast and may mean a boost for soybeans, said Dale Durchholz, the senior analyst for AgriVisor LLC in Bloomington, Ill.

The government’s crop forecasts this month reflected the biggest August reductions since at least 1974. In 1988, the final corn forecast increased 9.1 percent from the August estimate and soybeans gained 4.8 percent rains helped to boost yields, Durchholz said.

The wetter August weather pattern may be tied to rising eastern equatorial Pacific Ocean waters and the emergence of an El Nino weather condition, Gail Martell, the president of Martell Crop Projections in Whitefish Bay, Wisc., said in a report Aug. 16.

“The rains have at least stabilized the corn crop, and soybeans may add a few bushels,” Durchholz said. “The big USDA cuts probably account for most of the drought losses.”

Thriving, green soybean plants next to fields of brown and dead corn may be a sign that yield potential is lower than expected, Bill Wiebold, a soybean agronomist at the University of Missouri in Columbia, said in a report on Aug. 8.

Visually healthy fields may be the result of high nitrogen levels in leaves because there are fewer pods to fill with soybeans, Wiebold said in the report. The plant requires a steady flow of water moving up roots to the pods to produce beans. The prolonged drought may have caused soybean blossoms to abort and no pods for the seeds to develop.

“When there is no water, the system stops working,” Wiebold said. “That has happened in many soybean fields. We just have not experienced anything quite like this before.”

Damaged crops may not mean losses for growers as government-subsidized crop insurance and higher prices helps to partially preserve farm income, the Federal Reserve Bank of Chicago said in a report Aug. 16.
 

ADVERTISEMENT

  • good!
    ...and I hope them socialist farmers don't come around asking for no welfare from the govt, oh and tell them to stop growing Frankencorn to be turned into 'fuel' for autos and start feeding people again!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

ADVERTISEMENT