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Derecho damage could slow harvest this fallDerecho damage could slow harvest this fall

The obvious question the market has is what is the extent of the damage?

Matthew Kruse

August 19, 2020

4 Min Read
Drought stressed corn

I took my own crop tour this past weekend, driving through parts of Central Iowa.  “Shock” is probably the best way to describe seeing the fields damaged by the Derecho storm

Central and Eastern Iowa were garden spots going into the month of August, helping to make up for the drought damage accumulating in Western Iowa. That is why this storm is so frustrating, because for much of these areas impacted by the storm, farmers were expecting at or above trendline yields before the storm hit. 

What is most intriguing is that the storm didn’t necessarily decimate every field in its path. There are fields that are flat with heavy damage, but that is not the rule. You can find fields that have little to no damage next to fields that were flattened. 

It would appear the storm tested corn stalk resilience between different hybrids. With wind damage running through the fields like rivers, there was an extreme difference in how hybrids responded even in the same field.

How bad is it?

The obvious question the market has is what is the extent of the damage? I have had problems with stalk lodging in the past, and it can be an annoyance. Damage from the Derecho goes beyond this in some areas, but that doesn’t mean that all is lost. 

This storm came post-pollination, so the ears are made. While there is risk of quality damage, the combine can still pick up most of what is there, but at a very high cost.  Many of the fields will have to be harvested in a single direction at slower speeds.  It will make the harvest last three times longer, which is mostly why it is worse than your typical case of stalk lodging.   

Related:Derecho leaves path of damage in wake

I have seen some huge acreage estimates that could be grossly overstated. There is a difference between being windblown and wind damaged. The derecho path crossed from Northeast Nebraska to Indiana. A climatologist that I follow says 8 million acres were covered where there was damage.

If half of that is soybeans, we are talking potential damage to 4 million acres. The damage to soybeans does not appear to be near as severe. A farm manager I spoke with near Cedar Rapids says that the soybean fields bounced back up after being twisted. 

A 20% loss on 4 million acres is almost 150 million bushels. This is not insignificant, but the reality is this amount of production could be offset some place else with good weather. 

Meanwhile, drought

I am more worried about the drought damage that is occurring in West/Central Iowa.  It could be more severe than the damage from the Derecho storm.

Related:Derecho, demand: Why corn prices turned higher

On my same crop tour, I also saw a lot of soybean fields showing signs of stress.  August is when the majority of soybean pods get filled and so moisture is critical. The potential for a phenomenal U..S soybean yield is being threatened. 

Oddly enough, the Derecho did not bring near the amount of rainfall that most hurricanes do. Much of Iowa and other states need a good general rain more than anything and there is not much to get excited about in the forecast. We have had several chances of rain that never came to fruition. 

It appears we have to rely on surprise rains to get us to the finish line. The heavy soils are still holding but the lighter ground is giving up yield each day.    

Matthew Kruse is President of Commstock Investments.  He can be reached at 712-227-1110 or [email protected]

Futures trading involves risk. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that CommStock Investments believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. 

The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

About the Author(s)

Matthew Kruse

President, Commstock Investments

Matthew grew up farming near Royal, Iowa. In 2002 he co-founded an investment company that purchased and operated Brazilian frontier farmland.  As Chief Operating Officer he lived and worked in Brazil for nearly 14 years, overseeing production of 22,000 acres of soybeans, corn and cotton. He continues to participate in Brazilian agriculture by providing asset management services for institutional investors.  Today Matthew farms in Iowa and Brazil, and holds Series 3, 30, and 31 licenses. He received bachelor’s degrees from Iowa State University in Political Science and Communications, then earned his Executive MBA from Walden University.

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