Monthly Archives: December 2012

Landowner newsletter reports:

Based on history, expect a fourth consecutive year with below-trendline corn yields in the Midwest in 2013, says Iowa State University climatologist Dr. Elwynn Taylor.

“Historically, severely deficit precipitation years of the magnitude of 2012 do not recover to normal annual precipitation in a single year. Accordingly, an additional year of significant moisture stress is considered to be not unlikely and a fourth consecutive year of below-trend U.S. corn yield is a distinct possibility,” he says.

Taylor points to the precipitation patterns that followed the droughts of 1956 and 1988 – the two driest years in central Iowa since 1950 prior to 2012. “In both cases, the subsequent year also received below-normal precipitation and experienced below-trend yields in Iowa,” he states.

“It is not likely that subsoil moisture will be fully replenished by the beginning of the 2013 planting season.”

He says the precipitation outlook will become more definitive in the early weeks of 2013 as the likely phase of the El Niño/La Niña for the growing season becomes more clear. Writing in an online forum sponsored by Reuters, Taylor said he is using a corn trendline yield of 160 bu. an acre for 2013, based on USDA’s past 30 years of crop data. He also wrote he sees the 2013 U.S. corn yield at 147 bu. per acre compared to USDA’s 2012 estimate of 122.3 bu. per acre.

By: The Columbus Dispatch (Ohio)

While Big Oil and multinational food corporations continue to spend millions shamelessly exploiting this year’s drought in key agricultural states by spreading misinformation about American-made corn ethanol and the Renewable Fuel Standard (RFS), the fact remains the RFS is achieving what it was designed to do.
Some of these attacks come on the heels of a Nov. 16 decision by the U.S. Environmental Protection Agency declining waiver requests to suspend the RFS for 2012 and 2013. The RFS is a requirement that renewable fuels be blended into petroleum transportation fuels such as gasoline.
Blending corn ethanol into gasoline reduces our reliance on foreign oil, helping to meet our nation’s goal of energy independence. In 2011, thanks in part to corn ethanol, the U.S. imported 485 million fewer barrels of oil — greater than all the oil we import from Saudi Arabia.
The drought certainly has had devastating effects on many families, but waiving the RFS will not change that. We are very sympathetic to those in the livestock industry who are concerned about the corn price and supply, as many corn farmers raise livestock as well. However, even the EPA’s analysis of more than 500 scenarios confirmed that only a 1 percent reduction in corn prices would have occurred had the RFS waiver been approved.
The corn price plays only a minor role in the cost of food, as it makes up only 3 cents of every dollar spent on food at the grocery store. One fact conveniently left out of the rhetoric about food prices is that world crude-oil prices have more than doubled since 2005, a much more significant component of food cost than corn. According to the U.S. Department of Agriculture, a 50 percent increase in the farm price of corn means just a 0.5 percent to 1 percent increase in food prices at the grocery store. Even a questionable anti-ethanol study commissioned by the National Council of Chain Restaurants notes that any potential price increase in corn related to the RFS would be nowhere near 50 percent.
Recognizing the small impact the price of corn has on the cost of food, this study designed to disparage ethanol could suggest that any food-price increases as a result of corn would be nearly imperceptible to the average consumer.
Corn growers throughout the country have met all needs, and despite the recent drought, are expected to harvest the eighth-largest corn crop in recorded history this year. Only the starch in the corn kernel is used for corn ethanol, while the protein and nutrients return to help feed our animals.
Even with all the uncertainty, projections are there will be enough excess corn this year to fill the Empire State Building more than 20 times.
Finally, the ethanol industry supports more than 400,000 American jobs and is the most readily available and economical American-made renewable fuel on the market. Allowing access to the fuel market for ethanol through the mandate of the RFS is the only way to break the petroleum monopoly that has […]

John Maday, Managing Editor, Drovers CattleNetwork | Updated: December 14, 2012

Cow-calf producers are in the best profit position among beef-cattle segments coming into 2013. Stocker operators also have good profit potential, but cattle feeders and packers will continue to face tight margins, according to Cattle-Fax. Analysts Lance Zimmerman and Todd Kalous presented their latest projections to an international group of beef producers hosted by Novus International during their Global Beef Roundtable this week.
The group included individuals from Australia, Brazil and Mexico, along with Novus representatives and media from the United States.
The analysts say on average, cow-calf producers are earning $150 to $200 per head on their calves this year and good profitability will continue through 2013. Prices for all classes of cattle are likely to continue moving higher, but the rate of increase is slowing as the high price of beef begins to affect demand.
In spite of the 2012 drought, which affected at least 50 percent of the U.S. cow herd, cow slaughter dropped off compared to the 2011 rate. Zimmerman says producers in the Midwest have been highly motivated to keep their cows and are using a variety of alternative feeds to carry them through the winter in hopes of better conditions to come. If the drought continues over a wide area, we could see increased culling during the next year.
Cattle Fax expects the rate of U.S. cow culling to drop off 5 percent this year relative to 2011, and drop another 11 percent during 2013. Heifer slaughter has slowed somewhat, indicating producers in some areas are beginning to hold more heifers for breeding.
Eventually, as conditions improve, producers will begin rebuilding herds. A question though, is just how many more cattle we need, as beef production per cow continues to grow. Assuming that domestic per-capita beef consumption holds steady at around 57 pounds per year, beef exports expand to 20 percent of production and carcass weights level off, Cattle Fax says we will need to add four million more cows to U.S. herds over the next decade. If carcass weights continue to increase at the current trend line of about six pounds per year, we will need to add just two million cows to meet demand by 2022.
This year, supplies of calves and feeder cattle are down by over a million head. For 2013, Cattle-Fax projects a smaller decline of 200,000 head. The group expects our cow numbers to stabilize at around 29 million head over the next two years.
Domestic beef demand this year is down somewhat from 2011, largely due to higher prices, and beef demand for 2013 will depend largely on the overall economy. A 1 percent change in real income – up or down – affects beef demand by an equal percentage the analysts say.
For 2012, Cattle-Fax projects fed-cattle prices to average $122 per hundredweight, 750-pound feeders to average $150, 550-pound calves to average $170 and the beef cutout to average $188. During 2013, they expect all those prices to move […]

DECEMBER 11, 2012

Dry weather from South Dakota to Texas left the Unites States winter wheat conditions at their lowest levels since records of that type were initiated by USDA NASS in 1986. By November 25, more than one-quarter (26%) of the wheat was rated very poor to poor, fueled by abysmal crop ratings in South Dakota (64% very poor to poor), Nebraska (46%), Oklahoma (44%), Texas (40%), Colorado (34%), and Kansas (25%).
In contrast, beneficial precipitation fell across northern California and from the Pacific Northwest to Montana and North Dakota. Still, winter wheat struggled to emerge on the northern Plains due to the seasonal decline in temperatures. By November 25, a significant portion of the wheat had not yet emerged in South Dakota (60% emerged) and Montana (68%).
Toward month’s end, precipitation intensity increased across northern California and the Northwest. However, mild weather accompanied the storminess, limiting high-elevation snowfall. As a result, the end-of-month water content of the Sierra Nevada snow pack stood at just 4 inches, about 85% of normal for November 30.
Most areas from the Mississippi Valley to the East Coast experienced a cool, dry November. In the northern Mid-Atlantic region, dry weather aided recovery efforts from Hurricane Sandy. Farther south, mostly dry conditions promoted Southeastern fieldwork-including winter wheat planting and cotton and soybean harvesting-but caused renewed drought intensification in Alabama and the southern Atlantic States.
Monthly temperatures averaged more than 5 degrees Fahrenheit below normal in portions of the southern Atlantic region, but generally ranged from 5 to 10 degrees Fahrenheit above normal across the central and southern High Plains and adjacent areas of the Intermountain West.

DECEMBER 5, 2012

By Jennifer Stewart, Purdue University

A very dry Indiana November and abnormally warm start to December have sparked some nervous chatter in the agriculture community on the heels of the worst drought in decades, but the Indiana State Climate Office says it isn’t time for farmers to panic.
A cold November brought only 28% of normal rainfall to the state, but a northward shift of the jet stream and storm track are bringing warm, wet weather back to Indiana. With no definitive pattern in effect this year, such as El Niño or La Niña, that weather variability is likely to continue throughout the winter months, said Ken Scheeringa, Indiana associate state climatologist, based at Purdue.
“Our weather is going to continue to flip back and forth between dry and wet, but winter can be known for that. Don’t get too locked into one mode,” Scheeringa said. “Farmers like to look ahead to spring planting, but a lot can happen between now and April. We have four months for soils to fully recharge and our wet, early fall had already started this process.
“The combination of low winter evaporation rates and the harvest of corn and soybeans behind us means soil water demand is lower at this time of year, giving soils a chance to catch up. Even with little to no rain, soils aren’t likely to lose too much moisture.”
The lack of November rain caused parts of northern Indiana to slip back into moderate drought, according to the U.S. Drought Monitor. Sections of both northern and southern Indiana also fell back into an abnormally dry rating – a drought watch category.
That, combined with persistent drought in the western U.S., has Indiana farmers worried that the state could slip back into the same pattern. But Scheeringa said history is on our side.
“Historically, we haven’t had two significant droughts back to back, in part because of our geography directly north of the Gulf of Mexico,” he said. “The Gulf is a major source of our moisture and it’s really hard to shut off that water supply for an extended time. Our research shows the longest Indiana droughts have lasted about 18 months. The state can have frequent minor droughts, but if they happen in the colder months the impacts are less than if they happen during the growing season.”
That isn’t the case in the western part of the country. With no direct path to Gulf moisture, Scheeringa said it’s more difficult for the western states to break a drought pattern. Once western droughts take hold, they can last multiple years, or even a decade, as was the case recently.
“Indiana is in the eastern part of the country where drought years aren’t as connected,” he said.
December weather models continue to predict a wet, warmer-than-normal month around the state, although 70-degree temperatures won’t continue.
“We’ll be transitioning this week into cooler temperatures and rain, which may continue into mid-month,” Scheeringa said.