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August 11, 2012

Report no surprise to experts in the fields

‘We are worse than they think,’ Vigo farmer says

Howard Greninger The Tribune-Star

TERRE HAUTE — A lack of rain and hot temperatures have taken a toll on David McClain’s West Terre Haute farm and have impacted his cattle.

So when a U.S. Department of Agriculture report released Friday slashed expectations for corn and soybean production for the second consecutive month, predicting the lowest average corn yield in more than 15 years, it was no surprise to McClain.

“I think we are worse than they think,” he said of the report.

The USDA said corn production nationwide is down 13 percent from last year, the lowest production rate since 2006. Corn average yield, at 123.4 bushels per acre, could be down 24 bushels from last year, making it the lowest average yield since 1995.

Soybean production is forecast to be down 12 percent and bring the lowest per acre yield, at 36.1 bushels per acre, since 2003.

“We are way below normal on production,” McClain said.

 “In some areas it will be down 65 percent and in other areas down 40 percent on our farm. We are scattered out between [West Terre Haute] and Paris [Illinois.] It seems like where we are just in a dry belt,” McClain said.

McClain said soybeans are “still up in the air.” Still, McClain said soybeans may not produce much if  dry conditions continue through August.

“We are also in terrible shape on cattle feed and water. We are having to haul water to our cattle and they are drinking about 4,000 gallons a day,” McClain said. “We are making some silage out of some of our bad corn, but it is not working out too good either, as we are finding out there is not as much feed value. We still have to give additives.”

McClain said he also reduced the size of his cattle herd by about 100 to reduce costs, plus the beef he had to sell also weighed less when sold, lowering profits.

Jim Luzar, Purdue Extension educator in Vigo County, said Friday’s forecast had few surprises to Wabash Valley farmers who have seen a crop reduction first hand. Luzar said he visited several cornfields on Friday “which basically had no ears of corn to speak, so a local impact is definitely, definitely there,” Luzar said.

Farmers will now look to the USDA’s September report.

“The grain market is always forward-looking, and the market will look for uncertainty going forward,” Luzar said. “If there is anything perceived to be non-average about the quality of the crop, that will also impact [crop] prices.

“Right now, I think, it is what is in the ear of the corn that matters, which is still uncertain” as far as final corn production, Luzar said. Soybeans could still be improved from rain this month, he added. As of early Friday night, Terre Haute’s official rainfall was measured at 0.68 of an inch for August.

Future concerns are on the harvest. Will it be a steady harvest or will there be a delay in the harvest from a fall rainfall, or even winds, which could knock down drought-stricken corn? The corn “will not stand strong winds easily,” Luzar said.

One other factor this year is the amount of grain in storage.

In 1983, the Wabash Valley had dry weather and crop production was down, Luzar said, but the nation had a 4 billion bushel supply of corn in inventory.

 “Now there is less than 1 billion bushels, which is less than 10 percent of our total usage of corn. This will impact the volatility of prices,” Luzar said.

“I think we will see substantial volatility [in crop prices] from now until we feel comfortable about the 2013 crop,” Luzar said.

Reporter Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.

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