It may seem counterintuitive that, coming off last fall’s record-high U.S. corn production, supplies of corn and other feed grains are extremely tight. But corn use remains at record levels and, with soaring demand and poor early-season weather — especially in the Midwest — the supply could become even tighter.
“There’s virtually no cushion for any type of significant weather-reduced crop — especially corn,” said Keith Collins during a recent Environmental Working Group-sponsored forum. Before retiring last January, Collins served for 15 years as USDA chief economist.
“The rest of the world needs grain and oilseed. I think they’ll be looking toward the United States. If we don’t pull a (good) crop, particularly corn, domestic users — both feed and fuel users — are highly vulnerable to serious financial problems. This could cause very serious disruptions to both livestock producers and ethanol production.”
So, will the U.S. harvest a good corn crop? How vulnerable are we?
“We had some weather-delay issues with planting,” said Al Dutcher, Nebraska’s state climatologist. “We finally got our crop in and now have returned to a very, very wet pattern. It resembles sort of what Iowa and Illinois have faced. Unfortunately, we’ve seen precipitation events that are mind-boggling” in terms of the amount of moisture in a short time.
For example, a six-hour, late-May storm system dumped 10 inches of rain in the western Platte River valley, “which is some of (Nebraska’s) highest-yielding ground. Thirteen counties had extensive flood damage, and we can’t even assess how many acres will be lost to erosion problems and to drowning out the crop. Whether we’ll be able to get back in and replant is another consideration.”
Forecasts call for even more severe weather, said Dutcher. If those materialize, “we could have a really serious situation. This trend has been going on since last fall. We had a very wet period during pre-harvest of corn before a drying trend.”
In early December, “a very aggressive upper air pattern with a building La Niña event” brought storm systems into the central part of the country. That led to three consecutive weekends of “high precipitation value events …. In terms of liquid equivalency, we were looking at anywhere from 300 to 500 percent above normal precipitation. That marked the second December in a row we received this type of storm system output.”
After that the weather calmed but soil remained saturated. Then, storms returned to force late planting.
The Nebraska crop is “approximately a week to 10 days behind schedule …. If we replicate last year’s temperatures, we’ll be looking at Nebraska’s corn crop coming into tassel stage around July 18. Silking stage would be around July 25. Statistically, in the central plains, our hottest week of the year tends to fall during the seven-day period I just described.”
If temperatures are cooler than normal, that will push crop maturity to a later date. If the crop can get through pollination without heat stress, “we’ll still be looking at trying to get the crop matured prior to the fall freeze period. We’ve been fortunate that over the past decade the fall freeze has (hit) a lot later than we’d typically expect. But based on this year’s patterns,” an early freeze could occur.
Based on the early season and forecasts, said Dutcher, “it will take nearly perfect weather from this point forward to recover from all these problems. And that’s not even looking at what possible acreage may have been lost — and may not be replanted — in these recent rain events.”
Elwynn Taylor, an Iowa State University professor of agronomy and Extension climatologist, said the United States has been fortunate with a long string of good cropping years.
During the past two decades, “we only had two years when the crop was even close to trend-line yields for the nation. Since 1996, every year has been essentially a trend-line yield except for 2002 (well below trend) and 2004 (well above trend).
“We cannot expect to continue on this near trend-line. It isn’t a normal thing, although it has occurred occasionally throughout history.
“In fact, I looked back for the period of corn production records (which go back to the 1860s), and it’s not uncommon, it turns out, to go about 20 years with erratic corn production and then 10 or 12 years near the trend-line.”
Taylor is unsure when the country will return to the erratic conditions. “But I do know our corn is just as susceptible to erratic weather as it ever was. We do have much high yield potential and average because of the technology, plant breeding and (management).”
Nevertheless, under the same weather conditions experienced 50 years ago, “our current hybrids have the exact same percentage change in yield as they did 50 years ago. A bad year now will cut yield in half, just like it did in the late 1930s.”
This year, planting in the Corn Belt “was somewhat of a problem. This was perhaps overstated in the press, but nevertheless a problem. When planting was finally accomplished in most of the Corn Belt, we again entered a (period) of severe weather and flooding.”
While considering the economic impact of corn and yields, Taylor points to the great excess of corn in 1983. “The government decided to (employ) the PIK (Payment-In-Kind) program to reduce the excess supply. That corresponded with the first major drought we’d had since 1974 — there’d been a nine-year period of no drought conditions.”
By 1988, there was great market volatility due to a severe drought in the U.S. Corn Belt.
Bringing the analogy up-to-date, “we’ve had volatile corn markets in the past year up to the present,” said Taylor. “The one in 1988 was due to supply, the current one because of demand. And now we have the potential for both conditions to occur.”
Taylor added several other ingredients to the mix. “It was droughty in South Carolina last year. Historically, the major Corn Belt droughts begin there (16 of 17 did) and work their way west.”
Even though the year has begun wet, Taylor said there’s a chance drought will spread from the east. It has happened several times in the past.
“There is a drought condition that begins in the West — perhaps in New Mexico or Colorado — and works east. But it seldom goes east of I-35 that connects Dallas to Kansas City to Des Moines to Minneapolis.”
Having heard the climatologists’ comments, Advanced Economic Solutions economist Bill Lapp — who is also a member of USDA’s National Agricultural Statistics Service advisory board and former chief economist for ConAgra Foods — acknowledged the crop and corn supply are in a tough spot.
“I know how precarious yield development is, having looked at thousands of fields of corn. For those unfamiliar, there’s about a 10- to 14-day window in mid-July or the end of July — this year it’ll be closer to the end of July — when the silks develop. … “Those are hollow tubes that must capture some pollen that’s blowing in the air. That pollen goes down the tube and germinates the kernel.”
While the process sounds simple, it “must happen and be repeated in the Midwest states in that (two-week window) literally one quadrillion times. There are over 10 billion bushels of corn and each bushel has about 90,000 kernels.”
If it’s too hot or too dry, the development of those kernels “is certainly altered. Of all the years there’s been concern and angst over the successful completion of the pollination process, this year is the kingpin in my judgment.”