Drought enters fourth week
Uncertainties continue to drive market conditions as drought conditions extend past four weeks in northwest South Dakota.
According to South Dakota State University’s Extension program, half of South Dakota is in severe to extreme drought. The drought is not isolated to an area, or state, but is most importantly affecting an entire agricultural region known as the corn-belt. Farmers produce nearly 40 percent of the world’s corn crop in this region. Most of the corn-belt is in severe drought, the second highest category of drought, and this has many in the grain and beef business worried. Extension Climate Field Specialist Laura Edwards said much of the crop and cattle producing areas in S.D. have been severely impacted by the dry conditions, which are particularly bad in the southeastern and south central portions of the state.
“The corn down there looks really bad,” said Edwards. “A lot of the corn didn’t tassel and the soybeans are starting to wilt.”
She said that in terms of location, the four county area of Walworth, Dewey, Corson and Ziebach are looking better than the rest of the state, but aren’t escaping drought entirely.
“Those areas have received rain at nearly all the right times,” said Edwards. “The counties aren’t really experiencing drought like the rest of the state and corn-belt.”
The drought, which began in late June, was exacerbated by two consecutive heat waves, said Mark Svaboda of the National Drought Monitoring Center. He said drought conditions were created by high spring temperatures which kept plants from soaking up moisture, and heat waves that prevented plants from absorbing water at night.
“This drought has been characterized by its rapid onset and the heat associated with it,” said Svaboda.
He said drought and heat do not depend on one another to occur, but when they happen conjointly, they create conditions that stress both people and agriculture.
“The warm temperatures in the Spring burned off moisture too early and then when the first heat wave hit, it prevented plants from getting the moisture they need,” said Svaboda.
Droughts create self-perpetuating environment, and for this reason it is difficult to predict their end, said Svaboda. Droughts typically create a high-pressure environment that prevents rain bearing clouds from forming. There could be a possible end to the drought if El Niña transitions into El Niño and brings a moisture bearing jet stream from Canada down into the area but according to Svaboda, that chance is roughly 50 percent.
“The jet stream is a conveyor belt for moisture,” said Svaboda. “If it comes down it will bring moisture and end the drought, but the high pressure system creating the drought would have to subside first.”
Since April, rainfall has only been down marginally compared to previous years, but June is the wettest month during the summer and this year Mobridge received only 1.83 inches of rainfall. This is less than half of its expected average precipitation of nearly three inches. High temperatures are not expected to subside and typically rainfall does not increase leading up to fall. This could indicate Mobridge has received the bulk of the moisture it will have this summer and low moisture coupled with high temperatures does not bode well for crops. Typically, June and July months are critical for plants because during these months pollination occurs or plants, particularly soybeans, have passed that stage. It is then critical for plants to receive adequate moisture or face limited growth or plant death.
The year’s drought is coming at an especially inopportune time. In what is possibly the harshest drought since 1988, U.S. farmers planted their largest corn crop since 1937.
Mike Rausch of the Northern Plains Co-Op in Selby said corn crop yields will almost certainly be down this year as compared to last.
“Last year, we saw a lot of yields in the 150 to 175 bushel range,” said Rausch. “But this year most guys are talking 50 to 125 bushels per acre.”
He said he is hearing talk of farmer’s yields and the news has not been good.
“It’s pretty safe to say as far as corn and beans go we won’t see the yields we saw last year in this area,” said Rausch. “There’s going to a lot of corn that won’t make it and will be offered for silage.”
According to the USDA, as of July 1, 45 percent of the nations crop was in good to excellent condition. That’s down from 72 percent last month and 69 percent the previous year. Soybeans show a similar trend. 45 percent was reported in good to excellent condition compared to 65 percent in June and 66 percent from the same month in 2011 and the stress on crops is driving the prices up.
December corn futures (2012) are up more than 30 percent over last year’s numbers during the same month. Over the past year, December corn futures have made new highs 20 times and made 11 news highs since the beginning of July. December corn is currently trading at $8.13 per bushel. In August of 2010, corn sold for an average of $4.20 per bushel.
These high grain prices are driving up the cost of feed and forcing ranchers to make tough decisions, the effects of which, could impact them for decades according to Jeff Smeenk of the South Dakota Cattleman’s Association.
“This drought will have a huge long-term significance on cattle,” said Smeenk. “It could take years for ranchers to build up the quality genetics they had in their herd before the drought.”
Smeenk said ranchers will breed cows for generations attempting to build qualities that make them prime for slaughter or well suited to their environment. But building a herd has become more challenging for the cattle industry over the past decade as ranchers downsize their herds to compensate for extreme weather conditions and an increased demand for corn from overseas markets and ethanol. According to the U.S. Department of Agriculture, livestock populations are at their lowest since 1958 and calf populations are at their lowest since 1949.
Smeenk said ranchers will likely need to downsize their herds again to cope with the lingering drought, but there are measures that can be taken by the USDA to minimize how much they are forced to do so. In order to alleviate feed shortages, he said, the USDA can open up Conservation Reserve Programs for emergency grazing and haying.
“When you have to start selling off your good stock,” said Smeenk. “that’s when it starts to hurt. We’re lobbying to open up all CRP for emergency haying and grazing.”
There are currently more than 1.1 million acres of CRP in South Dakota. About half are now eligible for emergency haying and grazing. CRP can be hayed or grazed every third year, but in this time of emergency, said Smeenk, every available opportunity should be made to decrease feed costs or increase their ready availability.
“We’re lobbying the legislature right now in Pierre for as much CRP to be made available as we can get,” said Smeenk.