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Veteran Advisor

9 - 2 Weather Update

Good Morning.  There was some great dialog in some of the posts over the weekend.  Thanks for all that contributed.  You all are what makes this site great!  Let's get started.  Late last week I talked about the frost potential for our friend up in Canada, mainly in Ontario.  That event still looks likely Friday Night (the full moon is on Sept 8th):

 

10 Day forecast of 1000 mb (near-surface) temperature and wind from the GFS model

 

 

Most of Ontario & Manitoba looks to drop near freezing over the coming weekend.  I still don't think this will be an over-all killing event, but it will be the coldest temps of the season.   For some, it will end the growing season.  

 

For us here in the states, much of the same.  An active Jet Stream across the US (current):

 

10 Day forecast of 300 mb winds and heights from the GFS model

 

will continue to bring a chance of showers and thunderstorms, to a varying degree, to the Midwest this week.  Right now, the Gulf is open to the Midwest.   But later today, that gets shut off as a Low pressure system forms, like it has, in Canada and connects with the semi-permanent Low over, again, the Panhandles:

 

10 Day forecast of surface pressure and precipitation amounts from the GFS model

 

This Low will deflect the moisture from the Gulf East ahead of it.  The next round of storms will begin late next weekend and into early next week, as the Gulf again opens and streams North.  This looks again to be a frog strangler type event, and Hobby, I hate to say it, but once again, you could be adding flood waters to your fields.  This is going to be a multi-day event, the way it looks now, with IA, MO, IL and S WI taking the brunt of this weeks weather.  For the Broke Farmer in AZ - you have a couple of days to get the hay up you have cut, by Wed the weather returns, and you could see continued chances for rain all the way to the following Wed, and probably beyond.

 

We still have that sea breeze along the Gulf shore of Texas.  It is protecting them from hurricanes, and there are still none projected for the area.  We have tropical storm Dolly south of TX, but looks like it will die out in Mexico, and be a non event for the US.

 

The West Coast - what can I say, it stays dry.  Until the High in the Pacific breaks, you guys stay dry.

 

That's it for today.  I have a double shift tomorrow, so don't expect anything as I am too limited at work, and basically am down to my Iphone in certain parts of the building.  Have a great day guys!

 

Jen

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Re: 9 - 2 Weather Update

I want to add this - it's an article about our crops in MN from the Star Tribune over the weekend.  Thought you might like it.  (Note - this takes two posts to get the entire article)

 

Jen

 

 

 

 

AMPLE CORN, SCARCE PROFITS

 

By TOM MEERSMAN tom.meersman@startribune.com

 

  The prospect of a bin-busting crop has driven corn prices to their lowest levels in four years and raised fears of a prolonged slump for crop farmers in Minnesota and elsewhere.

 

   After three years of profits, analysts are calling 2014 a break-even year, at best. Some think prices could drop more and stay low into 2015.

 

   “It’s the absolute flip of where we were at 12 months ago,” said Mark Greenwood, senior vice president at AgStar Financial, referring to corn prices that have dropped from more than $6 per bushel in 2013 to around $3.60 on the Chicago Board of Trade in the past couple of weeks.

 

   The sputtering prices have significant implications for the economy of the Upper Midwest, which has outpaced much of the nation in recent years partly on the strength of a strong agricultural sector. Not only are corn prices down, but soybeans and some other crops have also dropped sharply.

 

   Beyond thinning farmers’ wallets, the impact could ripple outward to weaken a host of service businesses: seed companies, farm implement dealers, fertilizer marketers, herbicide applicators, and landlords who rent fields to farmers. The record harvest will also overflow grain bins after harvest begins this fall, according to federal officials, further straining railroads that are far behind in shipping last year’s crop.

 

   “A big part of Minnesota’s overall economy is from the outstate that flows through the metro eventually,” said Michael Swanson, agricultural economist for Wells Fargo. “So we better take care of it if we want to have long-term health for a big part of the state.”

 

   Lower prices, of course, are good news for buyers. When corn drops, livestock operators and ethanol producers benefit from cheaper feed and fuel.

 

   Swanson said consumers at the grocery store may benefit eventually from cheaper corn, which is an ingredient in cereals, cookies and other products. But he said it may take months to see price cuts as food companies first try to recoup losses from when corn prices were high.

 

   He said it’s not clear what is driving the magnitude of the swing in commodity prices.

 

   “We say it’s about supply and demand, but you really wonder sometimes,” Swanson said. It “boggles the mind” that the market thinks that corn was worth $7 at one point in 2012 and half of that value two years later, he said. “It’s incomprehensible.”

 

   Belt tightening

 

   For Tim Wiersma, who grows corn and soybeans near Albert Lea, it’s time to “pull back on the reins.”

 

   “Typically if a farmer has a buck he spends two, buying machinery, upgrading the house, buying a pickup or some toys or investing into another business or in the market,” Wiersma said.

 

   That happened when corn prices were high between 2011 and 2013, Wiersma said, and both farmers and local businesses benefited. This season will be different, he said, with decent yields in Minnesota and record crops nationally.

 

   “I don’t see this to be a devastating time because we’ve come out of some good years,” Wiersma said. “But if [low prices] persist and the costs don’t retract, we could see some exiting of farmers out of the industry,” he said.

 

   Wiersma said that he and other farmers often hedge their losses by selling on the futures market. He sold some of his expected 2014 corn crop months ago when prices were higher, he said, so that will ease the pain if he loses money or only breaks even on other acres.

 

   Bruce Peterson, who grows corn and soybeans with two brothers and a nephew near Northfield, said that farmers who did not “forward market” by selling some of their crop ahead of time are probably “below water at this point.”

 

   “It’s not all doom and gloom because the prices run in cycles and we’ve had a pretty good run recently,” he said.

 

   “Most people should have had some fairly strong profit to build up a little reserve capital and reduce some debt to weather a period of time when prices are negative.”

 

   But Peterson said that three years of healthy profits were accompanied by rising costs for fertilizer, seed, land rent and other expenses, and now everyone needs to recalibrate.

 

   Costs of production are “way out of balance with expected revenue,” said Dale Nordquist, associate director of the Center for Farm Financial Management at the University of Minnesota. Land values and land rental rates have just caught up to where corn prices were during the past couple of years, he said, but now corn has plummeted.

 

   “There’s no profitability at these current corn prices,” he said, and many producers will not be able to break even.

 

   Some analysts have predicted that corn prices may drop to $3.20 or $3.25 per bushel before bottoming out during harvest in early October. Prices of course depend on continued good weather, which has been ideal for corn and soybeans in most parts of the Midwest this year.

 

   The insurance trigger

 

   The center estimated that in 2013, the average Minnesota corn farmer spent $5.16 in direct and overhead expenses to grow one bushel of corn, and that two-thirds of those expenses were for seed, fertilizer and land rent. The estimates are based on real costs reported by about 859 farms that are part of the Minnesota Farm Business Management programs.

 

   If those costs stay about the same for 2014, said Swanson of Wells Fargo, and if corn prices remain at slightly under $4 per bushel, farmers could lose about $1.25 per bushel this year. “That would generate some of the largest losses that we’ve ever seen historically,” he said, and could trigger record amounts of crop insurance payments to farmers.

 

   The low prices may also be affecting land values. “Land prices have moderated following a multiyear period of strong growth,” according to the most recent quarterly survey of agricultural lenders by the Federal Reserve Bank of Minneapolis. Minnesota farmland prices dropped about 4 percent in the second quarter from what they were a year ago, the report said.

 

   Corn and soybean farmers have seen ups and downs in the market over the years, and many have invested in side businesses to spread the risk, such as raising livestock or specialty crops or selling seed.

 

   In addition to corn and soybeans, Peterson raises pigs and cattle, and owns shares in an ethanol plant. “That side of our operation will benefit from the lower corn prices,” he said.

 

   Kirby Hettver, who grows corn, soybeans and alfalfa on about 870 acres near De Graff in western Minnesota, said that if prices remain low, those at greatest risk will be growers who haven’t farmed long enough to build up equity, and who have large debt for machinery and pay high rental prices for farmland.

 

   Les Anderson, who farms about 1,100 acres near Cannon Falls, said growers cannot control whether corn prices go up or down, but they can control their own costs. “Raising corn is pretty much a break-even deal now,” he said. “I don’t think the prices are going to come back anytime soon, so everybody’s going to be tightening their belts and scrutinizing expenses.”

 

   That could include applying less fertilizer, buying less expensive seed, renegotiating land rent prices, and fixing farm equipment instead of replacing it, he said.

 

  

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Re: 9 - 2 Weather Update

 

Equipment demand slow

 

   Manufacturers have already noticed the change. Two weeks ago, Deere & Co. announced that it will put more than 600 employees at four locations on indefinite layoff because of weaker demand for its agricultural equipment. Last week the Moline, Ill., company announced another 460 layoffs at its tractor manufacturing plant in Waterloo, Iowa. Deere said it will also introduce “seasonal and inventory adjustment shutdowns and temporary layoffs” at other factories.

 

   Andrew Swenson, sales manager and one of the owners of Midwest Machinery in St. Cloud, was not surprised.

 

   “When corn prices are low, sales really slow down almost exponentially at the dealership level,” he said. New combines range from $300,000 to $400,000, Swenson said, and large row crop tractors typically cost $200,000.

 

   Equipment sales at Midwest’s 13 stores across central Minnesota have been healthy in recent years, Swenson said, but the company will need to adjust if corn prices remain low.

 

   “Our business is built now for $6 corn, so it’ll be a little bit of work to muscle through a depressed time,” he said.

 

   What will sustain his company if corn prices remain in the doldrums, Swenson said, is its parts and service departments. “That part of the business shouldn’t really fall off that much because farmers still have to plant, they still have to combine, and they have to use their machines just as much as they did when commodity prices were high,” he said.

 

   The two largest consumers of corn are animals and ethanol plants, according to the U.S. Department of Agriculture, and both may benefit if corn prices stay low.

 

   “The single largest cost for raising a hog is the price of corn,” said Dave Preisler, executive director of the Minnesota Pork Producers Association. In 2012 and 2013 when corn prices were high, he said, “probably some of the very best [hog] farms broke even and made a few dollars, but on average there were losses during those years.”

 

   Hog farmers should be able to make money this year, Preisler said.

 

   “Price doesn’t really make any difference in the big scheme of things,” he said. “What’s important is the margin: What are your costs and what can you sell your product for. That’s what keeps both crop and livestock farmers in business.”

 

 

 

 

 

 DAVID BREWSTER dbrewster@startribune.com   Bruce Peterson, a farmer near Northfield, looked over this year’s crop. Declining corn prices have heavy implications for the economy of the Upper Midwest.  

 

 

 

 

DAVID BREWSTER dbrewster@startribune.com   Bruce Peterson farms corn near Northfield. He said farmers who did not “forward market” by selling ahead of time are likely “below water at this point.”

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Re: 9 - 2 Weather Update

Talked to a young multigenerational farmer in North central Iowa. I didn't think his crop looked as good as he does.

 

Said it'l make at least 210 and will get a crop insurance check on top of it. Kind of wonder if he is going to combine it at 36% moisture and not correct for shrink. Just gross wet bu's.

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Re: 9 - 2 Weather Update

Some years ago, when we had the LDP's, I had a neighbor that filled his silo with high moisture corn, but opened the top sieve completely, removed the bottom sieve, and tightened the concave up to smash more of the cob, and called it all high moisture shell. Not quite the same. I knew about it because he was bragging about how many bushels he had gotten paid for on his LDP, and I had done some of the combining for him. I'd add more, but enough said....

Jen
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Re: 9 - 2 Weather Update

Jenny I can't see there being frost. Everything is 50f+ from Friday to Monday... Where in ontario? Thunderbay is going to be hotter than my southern position all weekend... Looks like a big storm coming to be honest.

Sorry I'm just not seeing it at this time
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Re: 9 - 2 Weather Update

Hi Farmerguy89 - Let's distinguish 'Frost' from 'Freeze'.  Remember,  a 'Frost' can occur and cause plant damage with air temps as high as 42 degrees F (5.5 degrees C).

 

 

It's about the heat flow. There are three fundamental ways of transferring heat: Conduction (direct contact), Convection (contact with a fluid) and radiation (electromagnetic waves).

Crops can experience frost even though the ambient air temperature is above freezing if the heat loss due to radiation (cloudless night) is greater than the convective heat gain from the air.
 
'Freezing' is when the temp drops below 32 degrees, and the water in the plant expands and destroys the cell walls, which, if severe enough, will kill the plant.  
 
Now, with that said, I'm not in Canada.  I'm going by what I'm seeing on the weather maps, that I have no reason to not be accurate.  And, actually, the temps have fallen more as of tonight.  Here's the latest maps that I am referring to:
 
10 Day forecast of 1000 mb (near-surface) temperature and wind from the GFS model
 
As you can see on the map above, this event starts on Sunday night, the 7th.  The full moon is the 8th.  The map above clearly shows large areas of Alberta to Ontario with cool temps.   Freeze here - no, frost, very possible.  (actually, the temps start dropping as early as Friday night, the 5th, but gets colder as the 7th approaches).  By next Thursday, the 111th, this is what we see:
 
10 Day forecast of 1000 mb (near-surface) temperature and wind from the GFS model
 
Everything from Alberta to Ontartio is cold.  This WILL BE FROST - some of these areas will see the end of the growing season in a freeze.  These temps are getting colder as the days have gone by.  One more map:
 
10 Day forecast of 1000 mb (near-surface) temperature and wind from the GFS model
 
 
This is for Friday, the 12th.  The cold now dips into the Northern Tier states of MN and ND.  Again, probably not a freeae here in the US, but this event is going to slow down crop development.
 
Anyway, this is what I'm seeing.  Coincidence that it is occuring over the full moon?  I don't think so, but we've had this argument before on here.  The US is going to escape most of this event.  I could have been worse....
 
Jen

 

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