Mid-western farmers are usually afraid of not enough rain hurting their corn harvests. But this year, annual rainfall already averages 150-300% across the nine states referred to as the “Corn Belt” and a big rain system is expected to hit on about June 6th. With most of the crop in the ground and a potential for rain storms and flooding to wash away corn sprouts, America’s expected record of a $90 billion corn crop could be in trouble.
After suffering a drought in 2013, farmers were wildly enthusiastic about this year’s cold winter weather and heavy rains being the right formula for a record corn crop. After futures contracts for corn hit a peak in late 2012 at over $8.20 a bushel, the price fell to under $4 a bushel at the start of 2014. But with this year’s risk of too much rain, the price of corn delivery for July has moved back up to $4.65.
After a slow start this year, corn planting had been back on track with an estimated 91.7 million acres planted mostly across Iowa, Illinois, Indiana, southern Michigan, western Ohio, eastern Nebraska, eastern Kansas, southern Minnesota and parts of Missouri. As of May 25th, US Department of Agriculture (USDA) estimated that 88% of the U.S. corn crop was in the ground, which matched the five-year average. 0About 60% had emerged as sprouts and the USDA estimated the 2014 national average yield would be 165 bushels per acre. This would be the best in 8 years and potentially a record.
A week ago, Jerry Gulke, President of The Gulke Group commented, “I’d say probably 79% of this year’s corn crop was planted into good conditions and is growing pretty well.” He expected that the El Nino weather condition building in the Pacific tropics would result in the summer heat would hitting “at the right time, so odds are we’ll get an above-average yield.” He expects a total crop 1.5 billion to 1.7 billion bushels, which would have been enough to meet all demands for feed, export, food processing.
But that expected heat hasn’t appeared and probably will not with the new storms coming in. Satellite images show that the growing season is running behind with the vegetation growth index well below 40% in a stripe from eastern South Dakota, Iowa and central Illinois. With heavy rains expected through June 20th, the Corn Belt weather pattern is starting to look like the waves of showers and thunderstorms that caused floods across the nation’s midsection with 1993. If the same pattern happens this year, crop losses could exceed $15 billion.
Weather terms like El Nino, the North Atlantic Oscillation and Pacific Decadal Oscillation do not mean much to the average consumer, until crop yields fall and the prices at retail jump. The old saying for the farmer is “If it ain’t something, it’s something else.” This year it looks like too much rain in the month of June.