Tag Archives: kansas
Drought Plagues 50 Million Acres Of Corn
Drought plagues 50 million acres of corn Angela Bowman, Staff Writer September 6, 2013 The Drought Monitor map released on Sept. 5, 2013. More hot and dry late-summer weather left the Corn Belt short on rain and deep in drought. The latest Drought Monitor report from the National Drought Mitigation Center showed drought intensifying in the Corn Belt and persisting in the West. “After such an ideal start to the growing season, the past two months have been much drier than usual, with temperatures slowly increasing,” said David Miskus, this week’s U.S. Drought Monitor author, in narrative accompanying the map. In the heart of America’s breadbasket, the drought leaves crops parched and farmers praying for rain. Last month, Iowa saw its seventh-driest August in 141 years of reporting, following its ninth-driest July. Nearly one-third of the state is in severe or worse drought, up from 22 percent reported last week. Yet, this pales in comparison to other states deep in drought, including Nebraska (66 percent in severe to exceptional drought), Kansas (39 percent in severe to exceptional drought) and Texas (64 percent in severe to exceptional drought). More than half of the nation’s corn and 42 percent of soybeans are now growing in drought conditions. “Given that U.S. producers planted an estimated 97.4 million acres of corn and 77.2 million acres of soybeans in 2013, current drought figures suggest that more than 50 million acres (nearly 80,000 square miles) of corn and some 32 million acres (more than 50,000 square miles) of soybeans are presently being affected by drought,” said Brad Rippey, meteorologist in the U.S. Department of Agriculture’s Office of the Chief Economist. “According to USDA, nearly one-sixth of the U.S. corn (16 percent) and soybeans (15 percent) were rated in very poor to poor condition on September 1. A year ago, near the height of the Drought of 2012, very poor to poor ratings stood at 52 percent of the corn and 37 percent of the soybeans.” While the Corn Belt dried out, part of the Southwest and West benefitted from the monsoon moisture. Ninety-seven percent of California remains in moderate or worse drought, marking the first time this number has fallen below 98 percent in nearly six months. Click here to see the full map. Continue reading
Many Risks Surrounding 2013 Crop
Sep 3 2013 The weather across the Corn Belt has made a full circle from 2012’s drought to the very wet spring of 2013 and now back to a moderate drought. The first four weeks of August in Decatur, IL, have produced 0.09 inches of rainfall and 12 days above 85 degrees, reaching as high as 95 degrees. Farmers should typically be preparing for soybean harvest in the southern Corn Belt by now, but very late maturing crops are delaying the harvest season. The hot and dry weather is causing concern over both corn and soybean yields, but the inevitable upcoming frost could cause an even worse problem for immature crops in late September and through October. Grain Prices December corn prices were nearly unchanged this month, closing at $4.83 per bushel. Extremely hot and dry weather across the Corn Belt in late August helped prices rebound after the successful pollination period ended in early August. The USDA estimated the average U.S. corn yield is 1.3% lower in the August WASDE Report to 154.4 bushels per acre. The Farm Service Agency released a report in early August on the amount of Prevent Planted acres in the U.S. and found 7.711 million acres were unplanted due to wetness complications with 3.411 million acres being corn. 7.5% of the entire corn acreage in Minnesota was unplanted this year. Speculative buyers have been slowly converting their net short positions in the direction of net long over the past two weeks signaling a longer-term rally. November soybean prices increased by 12.5% this month to close at $13.57 per bushel. There’s a high concern of even an average first frost date that will severely damage soybean yields this year due to the extremely late planting dates across the Corn Belt. The hot and dry weather this month also hurt soybean plants during their pod filling stage which is directly correlated to yield. In this month’s WASDE, the USDA estimated the average U.S. yield 1.7 bushels per acre lower to 42.6 bushels per acre. Ending stocks were also estimated 75 million bushels lower to an extremely tight 220 million bushels. The November 2013 soybean contract is currently trading at an all-time high. The September wheat contract decreased by 3.3% this month, closing at $6.43 per bushel. Estimated ending U.S. wheat stocks were decreased this month by 25 million bushels due to increased exports, but a stronger U.S. Dollar in August kept prices from moving higher. Additionally, the USDA estimated world wheat production at a record 705.4 million metric tons. Farmland Values Year over year, “good” farmland values increased 17% across the Seventh Federal Reserve District, although for the second quarter of 2013, values remained unchanged. Four out of the five states within the Seventh District, which includes Iowa, Wisconsin, Illinois, Michigan and Indiana, posted double digit annual increases in farmland values with Indiana leading the way with a 21% increase. In the Tenth Federal Reserve District, non-irrigated farmland values rose 18%, irrigated farmland values increased 25%, and ranchland values rose 14% year over year. The Tenth District includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, a portion of New Mexico and Missouri. The Creighton University farmland price index decreased this month for the eighth time in the last nine months, but remains above growth neutral at 55.8. Professor Ernie Goss noted, “Our farmland-price index has been above growth neutral since February 2010. However, lower farm commodity prices are slowing growth in farmland prices. I expect farmland price growth to continue to weaken as agriculture commodity prices soften.” Bankers estimated that only 20% of all farmland transactions are purchased by investors; this was the same percentage given in the spring when bankers were asked the same question. Crop Conditions As of August 26, 2013, only 59% of the U.S. corn crop and 58% of the soybean crop were in good or excellent condition. 22% of corn and 32% of soybeans were in good or excellent condition at this same point in 2012. Corn maturity is severely lagging with only 23% of the crop in the dented stage compared to 73% last year and the five-year historical average of 45%. Although corn pollination was completed in ideally mild temperatures, the extreme heat and dryness across the Corn Belt throughout August has put major stress on the crop filling kernels. Soybeans have also been stressed in the heat during the critical pod filling stage. At this point in maturity, even a historically average first frost date would cause yield loss in both corn and soybeans due to the late spring planting. Outlook Crop conditions are below average in the U.S. Corn Belt and the weather outlook is not very promising as high temperatures and low precipitation dominate local forecasts. An early to average first frost date will continue to loom in many trader’s minds throughout September. Farmers will start to plan out the 2014 crop year post harvest and should be happy to find lower input costs. Major fertilizer costs have significantly decreased over the past two months partially due to the world’s largest potash producer, Uralkali, ending their production limits. Potash prices were forecasted last month to eventually drop to the lowest since 2010. Continue reading
US Land Prices ‘Surge’ Despite Fall In Ag Profits
15 th Aug 2013, by Agrimoney.com Farmland prices in major US agricultural states defied weakening farm incomes to maintain strong gains – in some cases, accelerating – although many bankers feel they may now “have peaked”. Farmland prices in Plains states including Kansas, the top wheat-growing state, and Nebraska, a major corn and soybean producer “surged further” during the April-to-June quarter, the US central bank said. Prices of non-irrigated farms were 18.3% higher than a year before, with those of watered land soaring 25%, faster than the 21% growth recorded in the first three months of the year. “Despite expectations of weaker farm income, district farmland values continued to set records,” the Federal Reserve’s Kansas City bank said. The period “marks the ninth consecutive quarter in which irrigated cropland values have risen more than 20% year over year”, with lingering dryness in some area increasing the premium over land without access to water supplies. Weak income prospects The increase defied dents to farm income from weaker winter wheat yields and prices, and falling cattle values, “although an uptick in hog prices improved profitability for some hog producers”, the bank said. And prospects for farm takings remain “weak for the rest of the year throughout the district”, given weaker prices of corn and soybeans, harvested in the autumn. “Not only would lower crop prices reduce farm income, but persistent drought in parts of the district could limit yield potential, particularly in areas without irrigation,” the Fed said. “With lower expected prices and the possibility of a poor harvest,” lenders contacted for the Fed survey “expected farm income to be less than last year in each state in the district”, which also includes Colorado, Missouri, New Mexico and Wyoming. ‘Overall wealth’ However, it was a dearth of other investment opportunities, for farmers enriched by a strong period for farm incomes, rather than hopes for agricultural returns which was incentivising land purchases “Bankers indicated that expected farm income was not the main factor contributing to the value of farmland,” the Fed said. “Instead, bankers cited the overall wealth level of the farm sector, supported by several years of strong income, as the primary driver of farmland values. “Low interest rates and a lack of alternative investment options were also noted as significant factors.” Price forecasts Nonetheless, lenders expressed doubts as to how long this effect might last in the face of weakened revenue prospects. “While most bankers expected farmland values to remain at current levels, an increasing number of respondents felt farmland values may have peaked,” the fed said. “More bankers also expected farmland values to drop after harvest likely due, at least partially, to expectations of lower farm income,” although the decline was expected to be less than 10% over the next year. Weaker farm prosperity has already become evident in farm credit markets, with loan demand rising for the first time in three years, and repayment rates on borrowings weakening too, and expected to keep falling. The data follow a debate at an investor call by Deere & Co on Wednesday at which analysts persistently questioned forecasts by the tractor maker that cash farm receipts, a key indicator of machinery purchases, will fall only slightly in 2014, despite tumbling crop prices. Continue reading
