Ag outlook conference focuses on drought

By Becky Brooks

bbrooks@civitasmedia.com

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.

Posted by Becky Brooks on Feb 4 2013. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.