Dry conditions spell trouble for some U.S corn crop

Corn_Sweetcorn_resizedCorn stalks on several farms from Nebraska to Ohio are yellowing and the leaves are starting to shrivel as a dry spell in parts of the mid and central U.S. is taking its toll on crops throughout the region.

One Illinois farmer described the ground as “concrete” and said his 8,000 acre farm will be looking at 15 to 25% total crop loss if he doesn’t get any rain within the next week. This comes after excessive rain damaged plants on his farm in May and June and washed out 10 to 15% percent of his crop. Since this happens, shallow roots are a problem for the remaining plants, which are now struggling for the nutrients they need to fill kernels with sugar and starch.

According to a recent article, output is dropping more than forecast as conditions deteriorate and prices that plunged in July are rebounding, with the government likely to cut its crop forecast for a second straight month. Output in 2015 will drop 6.2% from last year to 13.332 billion bushels, the smallest since the drought of 2012, a Bloomberg News survey showed.

“Supplies are not as abundant as expected,” Dale Durchholz, senior market analyst at AgriVisor LLC, said in the article. “Rain makes grain until it doesn’t. Too much rain hides the yield losses much longer than a drought because the crops still look green.”

In Illinois, the largest corn growing state after Iowa, rainfall in the northernmost part of the state was 10% of normal in the first two weeks of August, National Weather Service data show. About 56% of the Illinois corn crop was in good or excellent condition as of August 9, the lowest for this time of year since 2012, according to the U.S. Department of Agriculture.

However, the article states that conditions are not uniformly bad. In some western Midwest states weather has helped boost potential yields and in Iowa, 83% of the crop was in good or excellent condition, the highest since 1994 for this time of year.

“Even if Iowa is really good this year, it will not be enough to make up for the nutrient losses in the eastern Midwest,” John Cory, the chief executive officer of Prairie Mills Products LLC, said in the article.

Cash premiums, the surcharge on top of the futures price paid by consumers to secure immediate physical delivery, are rising and that’s a sign that buyers are already worried about supply, Cory added.

In addition, the article states the corn may rise to $5 by the end of the year, reflecting tightening supply. In fact, The USDA last month raised its forecast of average prices for next year to $3.75 from $3.50 in June.

For more information, click here.

Comments are closed.