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November 13, 2008
Cool summer, wet fall delaying harvest
SUPERIOR, Nebraska (STPNS) -- Rain stopped harvest earlier this week. Local grain handling personnel predict at least another week of harvesting will be needed after the ground dries to bring in the fall crop. Producers report exceptional yields. Grain quality is also high. However, high moisture grain, rain, soggy fields and falling grain prices have dampened enthusiasm.
Because of a cool wet summer, harvest started two to three weeks later than usual. Last week, high winds layed down some of the milo. Freezing rain, ice and snow remain serious threats to the remaining unharvested crop estimated to be nearly 40 percent of the corn and milo. Thus, farmers are understandably nervous.
"There was lots of 50 bushel per acre soybeans, with some reporting up to 70 bushel per acre," Bruce Tinkham, Agrex grain merchandiser said.
Lynn Culbertson, Aurora Cooperative concurred. "The soybean crop was exceptional. We planned to receive 600,000 bushels of soybeans. Instead we took in 800,000 bushels so that limited available dry storage for corn. Corn can be stored on the ground, but beans can't. They simply swell up and rot."
Dryland corn yields ranged from 160 bushels per acre to 230 and milo from 100 bushels per acre upwards to 150.
Harvest has been spread over several weeks. As opposed to some years, an amble supply of rail cars have been available. As a result, to date more grain as been shipped during harvest than usual, opening up dry storage. However, with more than a third of the corn and milo crop yet to be harvest, lots of grain could still be stored on the ground.
The soybean harvest is nearly complete. However, Lynn Culbertson, Aurora Cooperative, knows of one farmer with at least 300 acres of soybeans yet to harvest. Some farmers reported dryland soybean yields exceeded irrigated yields and it is thought on most farms profit per acre on dryland exceeded irrigated land for all fall crops.
Basically, the soybean crop came in dry, however, both corn and milo were being harvested a percentage or two above the acceptable moisture content for long-term storage until last week when the crop seemed to be drying down. Much of the milo is being delivered at 15.5 to 16.5 percent moisture (farmers receive a dock in price when milo is above 14 percent moisture and corn is above 15 percent moisture.) Corn is coming in at 17 to 18 percent moisture.
"We'll be running our dryer for the next six months," Dave Healey, Agrex facility manager said.
Since both natural gas prices and handling costs have risen 40 to 50 percent since last fall, drying costs have dramatically increased. In addition, since grain prices are higher than at some historical points, shrinkage costs proportionally more.
The worldwide economic problems are affecting the grain market. Falling oil prices have affected the ethanol market. In addition, the world's grain supply is greater than last years.
"Lots of people have lost lots of capital, so they are not paying top dollar for commodities. China was a big player in the world grain market until after the Olympics when they pulled out of the market. The Ukraine and Russia had a big wheat crop, but it is not milling quality, therefore it competes directly with our corn and milo for feed. Argentina had a better than expected soybean crop and Australia had a bountiful wheat crop." Tinkham said, as he summarized some of the data from USDA November crop report released Monday.
"What happens next year will be interesting," Tinkham continued. "Last year producers planted when corn sold for $2.80 per bushel. Inputs were proportional and they sold the crop for $5 to $7 per bushel. The inputs rose in proportion to the (high) selling price, but now corn is back to in the $3 per bushel range. Fertilizer prices are falling, but those who locked in prices in July are stuck with high prices." (Most years, locking in summer prices for fertilizer and propane have been cost effective.)
In addition, the delay of the fall soybean harvest limited farmers' ability to plant wheat. Thus it is expected area wheat acres will be down next year.
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