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Corn Belt on edge of drought abyssCorn Belt on edge of drought abyss

Official parameters to declare a full-on, serious drought for the Corn Belt may not yet have been met. But with continuing triple-digit temperatures and a lack of rain, the situation could easily tip.There’s a 60 percent chance of an El Nino by August.

David Bennett 1

July 20, 2012

5 Min Read

Official parameters to declare a full-on, serious drought for the Corn Belt may not yet have been met. But with continuing triple-digit temperatures and a lack of rain, the situation could easily tip, says Elwynn Taylor, a veteran Iowa State University Extension climatologist and agronomist.

“For the most part, this is just at the edge of being a serious drought,” says Taylor, who has many followers operating farms and has long warned that significant, widespread drought loomed. “A lot of places are just abnormally dry. Others are at the beginning or middle stages of a drought.

“However, for the most part, we’re not really in severe drought yet – at least for most of the Corn Belt. Of course, a few locations are in severe drought.”

The last major Corn Belt drought struck in 1988. Such droughts usually arrive every 20 years, or so.

Among Taylor’s other comments to Farm Press:

On the 2012 drought…

“We really aren’t far enough into this yet to really make a prognostication on how things will turn out. That is, unless we use a weather forecast and assume it is correct.

“If we do use the weather forecast for ‘continued warmer than normal’ and ‘drier than usual’ all the way through July, then we can expect a significant reduction in the potential corn yield. Or, I should say, a reduction well below the trend-line yields.

“Last year, 2011, saw a well below trend-line corn yield in the United States. The trend is about 160 bushels per acre for corn across the country. Last year, that was at 147.2 bushels – well below the trend but not far enough below to be considered a Corn Belt-wide drought. The trend would have been down to around 144 bushels to legally be a drought.”

On La Nina/El Nino…

“Will the La Nina stay gone? There’s a 60 percent chance of that.

“Right now, there’s a 60 percent chance of moving into an El Nino by the time we move into August.”

(A move into El Nino) “would be very favorable for forages. We’d have a recovery from the summer doldrums when there’s a lull in the growth of forage plants. We could see those favorable conditions all the way from the Canadian border to the Gulf of Mexico. Right now, the Canadian border has ample moisture and reasonable temperatures.

“Canada has more water than they’d like this year – at least from the central region to the west coast.

“The central U.S. farmer typically finds La Nina not to be a friend. El Nino, particularly for the Midwest farmer, is their friend.

“When there is an El Nino, tropical storms seldom make it to shore with any serious strength and don’t arrive as hurricanes. When there’s La Nina, they can. So, there’s a whole different set of parameters when nearing the Gulf coast: a La Nina will let the big storms in while an El Nino puts a cap on them.”

On a typical length of an El Nino/La Nina…

“The typical sequence is El Nino followed by La Nina in 75 percent of the cases. El Nino is followed by ‘neutral’ in the following year in 25 percent of the cases. Then, there can be five years of neutral conditions in the next El Nino.

“However, this time, we’ve seen a La Nina that was well over two years in length. This is extraordinary since they usually last around 10 months.”

Marketing crops

On farmers marketing crops based on Taylor’s predictions…

“Different people call asking what I’d do in certain situations.

“I’m not in the business of giving crop marketing advice. I am in the business of likely yields and yield risks.

“What is the chance of having a trend-line yield? What is the chance of it being above trend or below trend? What about the probabilities of how much or below?

“The economists can provide an estimate of what the November contract for soybeans or the December contract for corn, people can say ‘with this national yield what could we expect the December contract to be at harvest?’”

On farmer queries…

“Most producers are as interested in their own place as they are in the market. They’re interested in the market for how much they’ll be able to sell their product for. But they’re interested in their own place to know what their product will be, what they’ll have to sell, maybe what they’ll have t commit to, right now.

“Most of them with old crop in storage have it committed, sold on some futures contract.

“The first question I ask them is ‘you may have some of your yield committed locally. You need to find out if the person you have the commitment with will take money at the CBOT price if you can’t deliver. Or do they insist you contracted for a bushel of corn and they want to be handed a bushel of corn, not a bushel of money.’

“These days, many times, cattle feeders won’t accept money. They want the corn or soybeans.

“This is a consideration that must be at the forefront. If you’re in a case where they’ll only take the product, you’ve got to hope you can deliver it. But don’t go speculating on that, at this time.

“You speculate with futures derivatives – calls, puts and the like – rather than with actual grain.

“If you do have the capability of delivering money rather than grain, then you can begin to commit your actual grain to the point you’re insured.

“Many have asked me ‘should I commit 25 to 30 percent of my guaranteed insured yield for this year? Corn is over $6.60.’

“In those cases, I think about one-fourth of it should be committed. If the price hits $7, go for half.”

About the Author(s)

David Bennett 1

Associate Editor, Delta Farm Press

David Bennett, associate editor for Delta Farm Press, is an Arkansan. He worked with a daily newspaper before joining Farm Press in 1994. Bennett writes about legislative and crop related issues in the Mid-South states.

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