Ag outlook conference focuses on drought
By Becky Brooks
It’s no surprise that the No. 1 factor affecting agriculture in 2012 was the drought, which stretched coast to coast in some level.
“The things you have to look at is the reds and maroons on the map,” pointed out Barry Ward, leader for Production Business Management for the Department of Agriculture, Environmental and Development Economics at The Ohio State University.
He was addressing the areas most severely affected by lack of moisture in the Midwest.
“We all know what happened in the month of July,” he said at a winter conference.
“On July 19, Indiana saw the worst drought… it started to spread into Western Ohio.”
Ward was one of the speakers in January at an annual four-county 2013 Ag Policy and Outlook Meeting in Bellevue, a city which sits on the corners of four counties. The four-hour session was sponsored by OSU Extension offices in Huron, Sandusky, Erie and Ottawa counties as well as Gibbs Equipment Inc. and First National Bank of Bellevue.
While Ward discussed the drought and its impact on land values, it was another speaker, Matt Roberts, who shared that for much of the country the drought has not yet ended.
Roberts is Associate Professor in the Department of Agricultural, Environmental and Development Economics at The Ohio State University.
“It was the worst drought since ’56–57,” Roberts told nearly 130 people at the Ag Outlook session. “We know it reduced corn and bean yields.”
Roberts compared a U.S. Drought Monitor map from July 31, 2012 to the nearly identical map for Dec. 4, 2012 monitor map of the country.
“It does not look any different,” he commented.
“The Great Plains and Western Corn Belt are still extremely dry,” he added. While Roberts said that section of that country has some dense snow fall, the snow amount was still lower than a significant rainfall.
The OSU educator also pointed out that the region was facing the “worst winter wheat conditions going into dormancy in the last 30 years.”
While Roberts said the current drought condition may or may not have an affect on Ohio corn and soybean production in 2013. He said there are multiple factors that can still change the production conditions by planting season – still he said the soil moisture is just one more factor that could be a negative.
The situation going into to the season allows less margin for error by individuals farmers, he stated.
Roberts said he would stick with 157 yield per acre harvested acres for corn and listed a 43 yield for soybeans for 2013–14.
After discussing the U.S. Outlook, Roberts also talked about the growing season in South America and global grain inventories.
He said Brazil is on track for a record crop while Argentina is expecting flooding.
The latter has lost 1 million acres to flooding, he added. While Brazil may have record harvests in 2013, he said that nation is challenged by transportation issues in bringing its grain to market.
Roberts also discussed factors affecting bushel per acre production.
“Right now what we are dealing with is anecdotes,” he said about information.
He said that the general rule is that corn-on-corn yields are believed to decrease bushel per acre production by 10 bushes a year. While many farmers have been willing to accept that loss, the general rule is not proving true in all instances.
In 2011 going into 2012, he said he has had reports of losing 25 bushel going corn-on-corn, and it is making some in the ag industry rethink the practice.
In the Midwest, he said there are more farmers going back to soy-on-corn production.
As for livestock, Roberts said the industry is not seeing the decline in beef cattle one might expect as a result of higher feed prices. But he added there has been a liquidation of hogs.
The ag expert said a large reduction in livestock does not allow for a quick turnaround should market conditions change.
If you lose cattle in the market, it takes 18 to 35 months to build that sector back up. Hogs take nine months to rebound, he added.
For 2013, Roberts said he was remaning constant with his predictions and he was sticking with 157 bushel per acre yield on corn.
He still issued caution.
He said the nation has three years running of a disappointing yield, which results in higher prices per bushel for the farmer.
But he warned yields could go to 160 or if there is another 2004 weather event (the perfect growing season), yields could be 170.
“We have been one year away from lower prices,” he told his audience.
But Roberts pointed out he advised caution going into 2012 and due to the drought conditions, prices per bushel were higher.