Cold, rainy weather has meant severe planting delays for farmers from Ohio to Nebraska and next weeks acreage report takes on heightened importance
In his 32 years of farming, Steve Fourez says hes almost never been so late planting corn and soybean crops on the 500 acres he farms in east-central Illinois.
Normally by the start of May hes finished planting corn, and soybeans are seeded soon after. This year, Fourez said, he wrapped up planting on 6 June, as cold, grey and rainy weather kept him idle. Fourezs experience is playing out across the corn belt, a deeply fertile agricultural region stretching roughly from Ohio to Nebraska.
Planting is so tardy that the US Department of Agricultures June 28 acreage report, an annual survey of what crops farmers planted this year, will take on heightened importance.
Mike Zuzolo, the president of Global Commodity Analytics and Consulting, said: This planting-delay issue, because of what states it has affected, will make the planted acreage report historically important for market direction.
Mike Tannura, the founder of T-Storm Weather, a weather forecasting service that focuses on agriculture, said the timeframe between June last year and June this year represents the wettest in the corn belt in 125 years, as the jet stream has largely stayed put, affecting precipitation patterns. Were crushing all kinds of rainfall records, he said.
Farmers planting woes pushed corn prices at the Chicago board of trade to five-year highs, with the December contract which reflects this years planted acreage trading around $4.50 a bushel. Market-watchers say grain markets are setting up for a volatile summer for prices.
The late start to the season adds insult to injury for farmers, who have wrestled with several years of low prices because of bumper harvests and slowing demand because of the US-China trade war.
The agriculture department is already trimming its acreage and production estimates for this falls corn harvest. In mid-June it knocked off 3m acres from its initial 2019 planting forecast of 92.8m acres, bringing it to 89.8m; and cut the national yield estimate by 10 bushels per acre to 166 bushels per acre, which Zuzolo said is unprecedented.
Estimates for additional cuts range from another 2m to 3m acres. This years total drop will probably exceed the previous prevented-planted acreage record of 3.6m set in 2013.
For the acreage report, USDA surveys farmers in the first two weeks of June about how much they actually planted, and the most recent weekly crop progress report as of 17 June showed 96% of the corn crop in the ground nationally. Usually its 100% by now.
Ken Morrison, the editor of market newsletter Morrison on the Markets, said he thinks traders are overestimating how much USDA will cut in the acreage report, since farmers had incentives to plant until mid-June to collect crop insurance payments.
Theres some speculation the significant delays may make the 27 June data less accurate. Morrison suggested USDA may re-survey farmers at the end of July and give an updated figure in the monthly August crop production report, noting there is some precedent to this.
What makes this year so serious is where the farmers are having trouble. Illinois is the second largest corn-growing state, and farmers there were only 88% done as of 17 June, when normally more than half complete planting in the first week of May. Shawn Hackett, the president of agricultural consulting firm Hackett Financial Advisors, said to see Illinois farmers this far behind is shocking.