Saturday, May 28, 2011


I woke up thinking this morning of the impact this weather is going to have on our income and the income of Ohio and neighboring states. Agriculture is the major business in this region and the income is really going to be down this year. Right when the economy needed the boost, too.

Our income and expenses will be a far cry from last year, the record of my lifetime. This year could be the record low for me and I expect many other farmers.

The ag suppliers have to be really hit hard with many fields left vacant this year with preventive planting crop insurance. We will slide right by the June 5 cut off date this week with very little corn planted.

It won't all go to soybeans, either, though if we get a good two weeks of weather we could plant a record number of soybeans. I still think there will be a lot of fields left idle this year.

"It is still difficult to put a firm finger on the number of cropland acres that have been flooded, or the impact on 2011 production. Here are some of the latest estimates.

Using the weekly percentage-planted figures from USDA as of May 22 and applying them to March planting intentions, University of Illinois Agricultural Economist Gary Schnitkey said the 18 reporting states stand at 79% planted, not much different from the 81% average since 1980. However, many key states still have substantial acreage unplanted. The states most behind included:

Ohio, 3.3 million
Indiana, 2.0 million
Minnesota, 1.5 million
Wisconsin, 1.5 million
South Dakota, 1.4 million
Illinois, 1.3 million
North Dakota, 1.3 million
Michigan, 1.1 million

If weather permits, "a great deal of planting can occur before final planting dates, and it is quite possible most of these acres will be planted to corn," Schnitkey said. If corn doesn't get in the ground by the government cut-off date -- May 25 through June 5 in the Corn Belt and upper Midwest -- Schnitkey feels it is unlikely that many of these Corn Belt acres will be planted to other crops such as soybeans. Many producers will opt to take "prevented planting" on their crop insurance instead because the payments may be larger than any returns expected from planting beans, he said.

University of Minnesota Extension Economist Kent Olson agreed, noting that corn needs to lose a lot of yield before soybeans would meet its expected profitability -- and fewer acres of corn and more soybeans would lower soybean profitability relative to corn even more.

The situation in the Dakotas and the rest of the Missouri River system is still in flux. The Army Corps of Engineers expects to release record amounts of water from the Garrison, Oahe and Gavins Point dams between now and at least early June. Mountain snowpack above the Fort Peck Dam in Montana to the Garrison Dam in North Dakota is 138% of normal, and the forecast annual runoff for March 2011 to February 2012 is 178% of normal. The dams already are near overflowing and the main snowpack melt has not even begun, according to the Corps. The Corps has not said how much additional flooding might occur.

If there's any state where corn may never get planted this year, it is North Dakota. The North Dakota State Climate Office's monthly rainfall maps show most of the state received 100% to 300% of normal precipitation since January, leaving soils saturated and lakes overflowing. For May 28 to June 8, the National Weather Service's Climate Prediction Center (CPC) predicts "widespread flooding across portions of the northern and central Great Plains," including all of North Dakota except the northeast quarter.

For more on the flooding situation in North Dakota, see "Water Begins to Dampen Farmers' Dreams," by DTN Ag Policy Editor Chris Clayton, in Ag News.
On the positive side, the CPC's forecast for May 28 to June 8 shows normal probabilities of rainfall, with higher-than-average probabilities for warmer-than-usual temperatures for the Dakotas, perhaps affording fields an opportunity to dry out.

According to Alexis Maxwell, senior analyst for market fundamentals at Lanworth in Chicago, about 2 million acres of cropland were inundated along the Ohio and Mississippi rivers in early May.

"From May 3 to May 13, standing water in the Ohio and Mississippi river basins have been observed on nearly 2.1 million acres of cropland in southern Illinois, southern Indiana, Kentucky, Missouri, Arkansas, Tennessee and Mississippi," Maxwell told DTN. The estimate is based on the company's satellite imagery; it has not yet analyzed other areas.

"But the net effect of this flooding on U.S. spring plantings is likely to be minor," Maxwell said. "As flood waters moved downstream and warm and dry conditions set in over much of the impacted area, a large portion of the flooded land dried out, implying that there is still ample time for many fields to be replanted. In much of the area we analyzed, soybeans can be planted as late as mid-June and rice as late as the end of May."

Lanworth estimates the floods have likely prevented planting of 200,000 acres of corn and may reduce the combined area of rice and soybeans by no more than 300,000 acres, given that soybeans could ultimately replace other intended crops.

The American Farm Bureau Federation (AFBF) came up with a bigger number, reporting that nearly 3.6 million acres of farmland were affected by the natural disaster. On a conference call, AFBF's Washington staff asked state AFBF staff how many acres in their states were flooded. Their list: Arkansas, 1 million acres, including 300,000 acres of rice and 120,000 acres of wheat; Illinois, 500,000 acres; Mississippi, 600,000 acres; Missouri, 570,000 acres; Tennessee, 650,000 acres; and Louisiana, 280,000 acres.

"There is no doubt about it, the effect of the flooding on farmers and ranchers is being felt deeply across the South," AFBF Chief Economist Bob Young said. "One is reminded of the '93 or '95 floods in terms of scale of affected area. While some may be able to get a crop in the ground this year, we also need to think about the long-term economic health of these farms and communities," he said, stressing the need for levees to be rebuilt.

Note, however, that flooding impacts or acres affected in this survey were loosely defined. "They were reported in whatever way the state staff chose to define them," Young told DTN.

DTN Senior Analyst Darin Newsom assessed the potential effect on corn supply and demand. His assumptions: 2 million acres unplanted (a 2 percentage point drop from intentions); 90% harvested vs. 92.2% USDA estimated in its May report; a trendline yield of 158.7 bushels per acre. The resulting crop would be 12.906 billion bushels. If demand didn't fall from USDA's projected 13.355 billion bushels, ending stocks would drop from USDA's May projection of 900 million to a record-low 301 million bushels, resulting in a stocks-to-use ratio of 2.3%. "That is the tightest ratio I see on record," said Newsom. "This is not likely to happen," said Newsom. "Prices will ration demand."

My guess locally is that a lot of the above will not happen.

It is going to be one interesting year to watch.



  1. Brings to mind the old quotation about "interesting times". Pretty depressing not to be able to plant when its time. I'm late here too and looks like the last half of my crop will not get seeded til June. Then we have to hope that frosts holds off til late in the fall.

  2. Finally got this thing to work again Ralph so the update today is everyone is trying to finish up planting this week. I still can't tell how many preventive planting acres are being taken to insurance.