2010 outlooks —
The 2009 crop year is done for the most part and farmers, along with their suppliers, are preparing for 2010.
As no one has built a crystal ball that foretells the future, Iowa State University Extension is holding a series of meetings examining the current conditions that could affect next year’s growing season.
Weather and markets are always a concern to farmers and these were addressed last week in Rockwell, in Cerro Gordo County. Elwynn Taylor, ISU climatologist and Chad Hart, ISU ag economist were on hand to answer questions.
Taylor said he sees five factors affecting next year’s growing conditions – soil moisture, winter temperatures, summer temperatures, spring rains and growing degree-days.
Iowa’s experienced its wettest October ever in 115 years of record keeping resulting in saturated soils through the winter. This has happened the past three years, Taylor said.
Any rain received during planting time makes it difficult for the soil to dry quickly delaying planting progress.
Last year’s winter temperatures were influenced by an extreme La Nina weather situation. This winter Taylor said the weather pattern transitioned into El Nino conditions and he is predicting a moderate El Nino winter.
Under El Nino conditions, winters are not as severe and weather conditions are favorable for crop production.
Taylor showed a map that displayed the national weather during July 2004. In 2004, the weather was coldest since 1992 in the Midwest while it was above normal in Oregon. This pattern was repeated with last summer’s temperatures.
Taylor’s advice was to watch the weather in Oregon because if it is warm there, it will be cool here.
For spring rain, Taylor said to watch the weather in Arkansas. Eighty percent of the time if it is wet in Arkansas in March, it will be wet in Iowa in April and May. Aprils have been getting increasingly more wet since 1940, he said.
Growing degree units will be problematic if they slide by 300 or more after July 4, Taylor noted.
This slows development. They are a bigger problem if they gain by 200 or more after July 4.
Taylor is predicting a corn yield of 160 bushels per acre next year with an October to November price of $3.79 for December corn. Under El Nino conditions, Taylor raised his yield to 164 bushels per acre and a price of $3.65.
Economist Hart stepped into the position of Robert Wisner after Wisner retired as an Extension economist grain markets specialist.
Hart said that one of the key conditions affecting corn usage and supply next year is how the economy will recover from the recession. He is assuming there will be a slow recovery.
Hart presented a table of corn yields showing yields steadily increasing each year with a peak number of acres in 2007 of 93.5 million acres. Corn acres in 2009 were 86.4 million.
Hart said due to declining livestock numbers, feed and residual use of corn will go down. However, ethanol usage is increasing replacing the loss of consumption by livestock.
Exports are dependent on the dollar and will increase as the dollar declines.
Hart sees corn yields continuing to increase due to higher populations at planting.
For 2009, soybean acres were 77.5 million with a total production of 3.319 million bushels. Demand from China is supporting the market now.
South America is working on a record soybean crop, Hart said, advising that market plans be made to take advantage of prices before the South American crop starts to arrive next March.
Looking ahead to 2010, Hart sees more activity in corn exports. South America is putting its efforts in soybean production making the U.S. the leading corn producer.
China, while the second largest corn producer, is home to the greatest demand of corn. Should China become an importer of corn, it would have an impact on corn prices.
Hart said that biofuels have introduced volatility in the grain markets that previously did not exist. Hedge funds have been attracted to the grain markets creating volatility, as well.
Corn usage by ethanol was at 3.57 billion bushels in 2008, 4.1 bb in 2009, and is estimated to be 4.43 bb in 2010 and 4.64 bb in 2011.
Hart said the futures market looks bullish for both corn and soybeans in 2010 with corn at $4.25 and soybeans at $9.94.
Contact Clayton Rye by e-mail at email@example.com.
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