As farmers prepare to work through this year's corn harvest, Hurricane Irene and last weekend’s tropical storm were the latest in a number of weather-related challenges that have impacted corn acreage, yield and growing conditions across the United States. This has definitely been a year to test the American farmer’s resilience, reports the National Corn Growers Association.

"We had delayed planting and flooding in the upper Midwest, we lost acreage to floods along the Mississippi River and we saw our crops fade in scorching drought in Texas well before the hurricane came along," says Garry Niemeyer, NCGA’s first vice president and an Illinois farmer. He points to conversations with peers at the recent Farm Progress Show in Decatur.  “I heard from many of my peers across the Corn Belt about what's going on in their fields and their expectations come harvest, and we saw first-hand some of the problems of a very hot year in important areas of the Corn Belt,” he notes. “Our heart goes out to those who lost all or some of their crops this year."

As USDA reported in this week’s crop progress report, 52 percent of the corn crop in the top 18 states is rated good or excellent. That compares to 69 percent at this time last year. It’s also down two 2 percent from the previous week. While there are some bright spots, some states have suffered. In Texas, only 10 percent of the crop is rated good or excellent, with 68 percent rated poor or very poor.

But, concerns about corn supply are only part of the reason why corn prices and, more broadly, commodity futures overall are high, Niemeyer says.

"In addition to market fundamentals, we're continuing to see the impact of using the commodity markets as an investment vehicle. This is driving up commodity markets and leading to higher energy prices," he adds. "Just as our customers are paying more for the corn we grow, we are paying higher prices for land and all of our inputs, such as fuel, nutrients and crop protection."

Next Monday, Sept. 12, USDA will provide its monthly World Agricultural Supply and Demand Estimate, and time will tell if we ultimately see a 2011 corn crop now estimated at nearly 13 billion bushels, the third largest ever, Niemeyer notes. Market analysts are betting that won’t happen as recent yield estimates are running between 147 bushels per acre to a generous 151, and the bias is toward the mid-140-bushel camp.  There’s also the issue of continuous acreage erosion, so the final number of harvested acres is sure to be less than the 91 million that USDA predicted early on in the season.

What ultimately happens to the 2011 crop also shows the need for a sound farm policy, which is why the discussions about the 2012 Farm Bill are so very important right now, NCGA contends.

"This is a year that drives home the need for crop insurance and risk-management tools necessary for our country to provide critical assistance to farmers when they face crop losses due to adverse weather conditions, crop disease or volatile markets," Niemeyer says.

The budget rhetoric suggests that everything will be brought to the table. Again, those with a gambling nature are inclined to bet on crop insurance as being the future crop safety net, while direct farm payments are likely to go away.

"We're looking forward to a farm bill that delivers aid to farmers when they need it in a way that is faster, simpler and smarter," he adds.


Source: NCGA