Weather, trade outlook mixed for crop growers
The crystal ball was working overtime Wednesday at the Fort Wayne Farm Show.
As is traditional at the annual event at Memorial Coliseum, one of the best-attended seminars focused on the upcoming year’s outlook for weather and marketing conditions for corn and soybeans.
And the experts : Ryan Martin, chief meteorologist for Hoosier Ag Today, and Chris Hurt, Purdue University agricultural economist : had mixed news.
Temperatures and precipitation won’t likely play a huge role in planting decisions this year, Martin said. But foreign policy : particularly U.S. trade policy with China : will impact decisions about soybeans.
Martin said it will likely be colder than normal in northeast Indiana through the end of February, close to normal for March and slightly above normal for April. Precipitation, he predicted, will be at or below normal in each of those months.
“I’m not too concerned about planting delays this year,” he said, adding they were a big issue last year. He also said he doesn’t foresee summertime drought.
“But I’d be worried about the possibility of a late frost this year,” he said, noting that would be between May 1 and May 10, the traditionally cited last frost date here.
The crop outlook was more complicated, Hurt said.
Last year, corn yields in Indiana reached record levels, Hurt said, predicting that this year, “we are going to get even higher corn prices.”
While still about 40 cents per bushel under the $4 of a few years ago in 2019, the higher price will likely even things out, he said.
Soybeans are a different story.
Because of the trade and tariff situation, U.S. farmers lost a major and growing market in China, Hurt said. The result is a huge stockpile of soybeans that remain in storage, both on farms and in commercial storage.
The beans are being stored because there’s either no market or only severely depressed prices.
“We’re in a time of great uncertainty with how that (American-China trade policy) is going to play out, ... and that’s continuing,” Hurt said, adding there might be more answers in 40 to 60 days.
But it’s clear, he said, that U.S. farmers missed a big opportunity when they could not sell to China in October and November, when prices were higher and before soybeans from South America would come to market.
This spring won’t be a good time for U.S. soybean farmers to ship beans to market in China if tensions ease, Hurt said. That’s historically the time for the lowest annual prices, he said.
Meanwhile, other parts of the world, such as Europe, Mexico and South America, haven’t picked up the slack by buying U.S. soybeans, he said.
Federal statistics show China bought 772 million less bushels of soybeans between September and Dec. 6, he said, while the rest of the world added only 305 million.
Meanwhile, Brazil increased shipments, he said, showing a graphic of more than 100 ships heading from Brazil to the Far East in August.
“Arrow in the heart. Received,” he said.
The soybean situation may be worse now, he pointed out, because federal statistics haven’t been updated because of the partial shutdown. He urged farmers to apply for federal trade assistance to back up soybean prices, noting it might be several years for the price and surplus situation to right itself.
Hurt said it remains unclear whether the soybean outlook will cause U.S. farmers to shift more of their production from soybeans to corn.
“Had we known, we wouldn’t have planted so many beans,” Hurt said. “But you have to put the seed in the ground before you can know what the demand will be.
“And, the grand bargain with China could still be coming. So we’ll have to wait and see.”