Relentless torrential rains in spring and summer, followed by early autumn cold and snow, have stalled harvests in parts of the Corn Belt. It's another blow to farmers already struggling with the effects of planting delays and a trade war that have applied downward pressure on commodity prices they receive.
The 2019 corn and soybean harvests have been especially delayed in North Dakota and Minnesota — precisely the states suffering the most from the U.S.-China trade war due to their reliance on exporting to Asia through West Coast ports.
As of Dec. 1, North Dakota farmers have harvested only 36% of their corn, according to the U.S. Department of Agriculture (USDA). This is because wet conditions have left the ground too soft to support harvest equipment. This is about 50% less harvest compared to the same time in 2018, and about 60% less than the five-year average from 2014-2018. Soybeans in North Dakota are doing better than corn. However, growers in the United States — the world's biggest corn supplier and the second-largest soy exporter — continue to play catch-up.
Also, in North Dakota, farmers have been able to harvest only 30% of their corn because wet conditions have left the ground too soft to support harvest equipment. Growers in the United States — the world's biggest corn supplier and the second-largest soy exporter — continue to play catch-up.
SONAR Ticker: RAIN.FAR
Early autumn storms poured salt in the wounds of many growers at a time when shorter daylight hours and cooler temperatures limit evaporation. Grand Forks, North Dakota — part of the Fargo freight market — received 11.6 inches (29.4 cm) of rain from Sept. 1 through Oct. 31. This is almost three times the average rainfall for the two-month period, according to the National Weather Service (NWS). The FreightWaves SONAR chart directly below shows the actual daily rainfall in the Fargo market (RAIN.FAR), based on an average of measurements from several observation sites.
Early wintry weather added to farmers' woes. They like to have everything harvested before the first snowfall because snow prevents combines from cutting the crops close to the ground. But this didn't happen in Grand Forks. The city was slammed with 7.1 inches of snowfall in October, with 4.4 of those inches on Oct. 11 alone. On average, Grand Forks gets 1.5 inches in October, and the first measurable snowfall (at least one-tenth of an inch) comes just before Halloween. At the time of the Oct. 11 snowfall, farmers had harvested only 1% of the state's corn.
Wet or humid conditions, as well as delays and stress from extreme temperatures, can all elevate the risk of mold development. This is what Dr. Alexandra Weaver of Alltech, a Kentucky-based feed supplement company, told Reuters in early November. Some types of mold can produce mycotoxins in feed grains. These mycotoxins can sicken livestock, forcing farmers to sell damaged grains at a steep discount.
This year's extreme weather has made farming particularly challenging for Illinois growers, keeping tractors and combines busy throughout November. Illinois is the nation's top soybean-producing state and No. 2 for corn production. But fields were waterlogged and submerged for weeks, leaving 1.5 million acres unable to be planted. Despite the obstacles, farmers have recovered enough to harvest most of their crops, with 93% of the state's corn and 100% of soybeans harvested as of Dec 1.
Flooded farm in the Midwest, spring 2019. (Image: USDA)
"It's not as bad as we thought it might be," Krista Lisser, spokeswoman for the Illinois Department of Agriculture, told the Chicago Tribune on Nov. 28. "Still, the weather has not been kind to farmers this year. It's been blow after blow after blow."
At this time a year ago, 100% of the state's corn had been harvested. The five-year average for the final week of November is 99%. The soybean harvest is about 5% behind average, according to USDA statistics.
"Let's just say, it hasn't exactly been fun this year," said Brandon Walter, a farmer from Harvard, Illinois, in McHenry County. "It's just like anything, though. We'll make the best of it."
Recent micro-movements in prices farmers receive per bushel of soybeans (SONAR ticker: SBNPRC) in Illinois and North Dakota aren't very promising, and prices have been falling in Minnesota (chart directly below). For all three states, the latest prices (as of Oct. 27) are near their lowest levels in about 10 years.
Economists blame this not only on Mother Nature, but on tariffs and trade disputes between the U.S. and China the past couple of years. In response to U.S.-imposed tariffs, China has been buying fewer and fewer U.S. agricultural products since early 2019. China is the world's largest consumer of soybeans and accounted for 60% of U.S. soybean exports before the trade disputes started pulling shipment levels down. China made up almost $5 billion in U.S. farm product exports in 2018, according to the U.S. Census. China began importing soybeans from Brazil, which the USDA expects will soon surpass the U.S. in soybean exporting to China.
Back to the weather, wet fields and soggy crops have also meant farmers and grain elevator operators have needed to dry the corn so it is usable for processing or feed. High-powered fans and drying systems have been gulping propane, leading to a shortage. Harvested corn is usually stored in grain elevators and silos. Wet corn can spoil after several days.
For Evan Hultine, a farmer near Interstate 80 in Bureau County, about two hours southwest of Chicago, the delayed planting season meant his late-growing corn has not had the chance to dry out this fall. There haven't been enough stretches of rain-free days. Hultine uses a drying system, powered by liquid propane, to reduce the moisture of the corn kernels he stores in giant grain bins.
"Starting so late really sets everything back," said Hultine, who decided to grow only corn this year because he was concerned about how tariffs and international trade wars would affect the soybean market. "It's been a struggle all year."
Hultine is about 85% done with his corn harvest. Normally, he said, the work is done weeks before Thanksgiving. But he was not able to start planting until May 31, finishing unusually late on June 11. He's hoping for one more stretch of dry weather so he can finish up in the next week or 10 days.
"My dad always said, ‘If you're going to farm, you gotta love it. Because Mother Nature's going to be tough sometimes,'" Hultine said.
Because of the propane shortage, the Federal Motor Carrier Safety Administration (FMCSA) issued a regional emergency declaration that relaxes hours of service (HOS) regulations for drivers who ship propane to farmers throughout the Midwest. The temporary rules are in place until Jan. 10, Lisser said.
As the harvest drags on, farmers already stressed by tight profit margins will likely face extra costs for equipment repairs, diesel fuel and propane to dry stored grain that will not dry adequately in the field.
Corn prices (SONAR Ticker: CORNPC) aren't giving farmers much hope, either. They have been rising a good bit in North Dakota since late August but only slightly in Minnesota. They have been dropping in Illinois since late July.
Growers are working frantically to harvest what they can by the end of the year. Unfortunately, the National Oceanographic and Atmospheric Administration predicts a 33-40% chance of above-normal precipitation across Illinois, Minnesota and North Dakota from the rest of December through February 2020. The weather and the financial squeeze could be enough to push more farmers out of business.
FreightWaves Market Expert Alexandria Quevedo contributed to this article.
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