this whole deal is most likely a temporary swing, the south american farmers are no doubt watching and chomping at the bit to get planted. If it were to be freakishly dry here for several years in a row then all sorts of changes are in the works.

something interesting is the map of the palmer drought index from the 1930's, specifically the one I was looking at was 1934 on weather.about.com

kind of a wacky coincidence that the 30's depression and drought would be reoccurring eighty years later

U.S. Growers Expect to Produce 13 Percent Less Corn
USAgNet - August 13, 2012

Affected by one of the worst droughts on record, U.S. corn growers are forecast to harvest 87.4 million acres in 2012, down 2 percent from June estimates, according to the Crop Production report released today by the U.S. Department of Agriculture's National Agricultural Statistics Service.

The 2012 growing season began on a very optimistic note for growers, with the fastest corn planting pace on record. The growers' optimism waned, however, when the warm spring was followed by a very dry summer, developing into a drought throughout most of the Corn Belt states. Despite planting the largest number of acres to corn in the past 75 years, growers are forecast to produce 10.8 billion bushels in 2012, down 13 percent from 2011. Based on conditions as of August 1, corn yields are expected to average 123.4 bushels per acre, down 23.8 bushels from last year.

Just as with corn producers, soybean growers are greatly affected by the drought conditions in the United States. This year's soybean production is forecast at 2.69 billion bushels, down 12 percent from 2011. Soybean yield is expected to average 36.1 bushels per acre, down 5.4 bushels from the 2011 crop.

In contrast to corn and soybeans, all wheat production remains largely unaffected by the drought and is forecast at 2.27 billion bushels, up 13 percent from 2011. Based on August 1 conditions, the yield for all wheat is forecast at 46.5 bushes per acre, up 0.9 bushel from last month, and up 2.8 bushels up from last year. Harvest in the 18 major producing states was 85 percent complete by July 29.

The report also included the first indication for this year's cotton production. Growers are forecast to produce 17.7 million 480-pound bales this growing season, up 13 percent from 2011. Producers expect to harvest 10.8 million acres of all cotton, up 14 percent from last year. This forecast includes 10.6 million acres of Upland cotton and 233,400 acres of Pima cotton.

NASS interviewed more than 28,000 producers across the country in preparation for this report. The agency also conducted field and lab measurements on corn, soybeans, wheat and cotton in the major producing states, which usually account for about 75 percent of the U.S. production. NASS is also gearing up to conduct its September Agricultural Survey, which will focus on wheat, barley, oats and rye growers. That survey will take place during the first two weeks of September.

The above is the latest USDA crop update status as of August 1, 2012.
Last year the crop was 12.4 billion bushels with minimal carryover and thus prices moved up into the $6-$7 range. The market was trading this spring on the CBOT in the lower $5.00 range based on at that time a projected 14 billion bushel crop. We are now projected to be about 25% below that projection but 13% below last year's actual production. The rapid price increases over the last 6 weeks may well have started the slowing of demand response that typically happens when prices get that high.
If we go into next spring with very high prices we will probably see the most corn contrcacted for future delivery than we have ever seen. That could make three years of high prices with one of them even being a very large yield year. If you contract corn at $8.00 and the market falls to $5.50 due to a big harvest you don't mind buying corn if you wind up short.
$8.00 corn and $16.00 beans will make crop insurance extremely costly but as we have discusse don this thread a necessary production cost for most producers who can not withstand revenue shortfalls due to low yields.

Bryce

for what I've been hearing and seeing, they are not going to back off the mandate as the Ag secretary said that at this time there is plenty of ethanol in storage at this time to make sure the there is enough for 2013. There are some plants starting to quit making ethanol as the price of corn is too high....but will be able to start back up if corn gets back into the 6.00 range. At this time South America is a big player cause they will plant as much corn as possible during their "winter" growing season and if they get the rains etc, it could bring corn down some...but if they are dry, it could get VERY interesting....do I think corn will hit $10.00...for everyones sake, I hope NOT!

My only comment on speculation or anticipation of $10 corn, is that it has to get to $9 first.

Its hard to compare this years yields to previous drought years, as far as a production stand point, because the genetic capabilities of corn are not the same from 5 years ago, or 10 or 15 years ago, this isnt the same corn planted in '88, nor are the same farming practices being used today as they were in '88.

Every person who eats food in most first world countries or receives aid in third world countries, in form
of rice or wheat, etc. has benefitted from GMO crops. Millions and millions of people are better off because of it.

Pretty hard to argue with any of Nick's posts on this one. I learned quite a bit from 'em.

Maybe but unlikely if corn gets too high it will stop being used decreasing demand and prices,( this according to the ah financial advisors) however it might get there. I personally would love to make 6.50 a bushel on 150 bushel corn as compared to $10 corn at 50 bushels per acre. Another bad thing is you get less for feeder cattle so it hurts on that side too. I guess it helps though when corn is $4 and feeder cattle prices are high.

If we had the same genetics with this drought as we did in 1988 we would be talking about harvesting 5-7 billion bushels of corn not 10.8 billion, ditto the soybeans also.

In 1988 the average USA corn yield per acre on an average year was about 130 bushels per acre instead of about 160 like it is today. With our current demand worldwide for food and fiber we know we are not in Kansas anymore when 123 bushels per acre is a crop yield disaster for billions of people. We wonder why most nations subsidize their agriculture, even if they are developing nations. We can see what 120 dry days can do to the food supply and they want to prevent starvation, anxiety and anarchy from being a huge factor in their nations or for their citizens.

Bryce

i wish that theym did not make ethanol out of amy grains as ethanol is junk as a fuel. as i can buy nonethanol reg for 75cents a gal more and get more mpg and its still costs less to fillup

You need to talk with the politicians who made ethanol the only legal gas additive.
Most of those politicians are not in favor of alternative enegry sources either so we will live with the mandate for some time. If the Congress and the administration would just agree to open up the mandate and suspend the current percentage just the action of doing so would probably drop prices at least for the short term. A lot of ethanol plants will slow production or stop while corn stays a couple dollars above profit levels.

Bryce

X2 on that!!!

with corn being so high heard beef is gonna crash, everyone is liquidating and flooding the market, however dairy is going to be up in our area due to the yogurt demand

There will be a 2% drop n beef cow numbers nationwide. We had the smallest calf crop in beef since 1949. Beef is the most expensive animal protein to produce. Pork, poultry and eggs will be food bargins even if very high in price.
I don't see huge sell offs of beef as the herd is already down with dry weather being and issue for much of the range area for over a decade. Nationwide there will be about 16% less alfalfa hay and in the Upper Midwest more like 30% so we will see a lot of pressure on dairy also which is occuring in the West as we have seen a $2.50 per CWT increase in the November dairy futures in the last two months in anticipation of lower milk due to heat and lower feed inventories.
Feed lots are holding off on buying feeders and letting them get to 750 to 800 before finishing instead of 600 this saves corn and also they pay less per lbs. even if they pay more in total. We will see leaner or lighter pork going to market too and all these changes will lower corn usage. Right now the dairy, beef, pork and poultry adjustments coult drop usage by 1.2 billion bushels which is about half of the loss from last year's total production. Price rationing does work, it will help stretch the supply. Ethonal, beef, beef, poultry and dairy all seem to be able to deal with about $6.50-%7.00 corn but not over 7.50 and thus we will see all industry sectors retrench and wait for better production and more corn to feed. All the other commodities will follow corn this year and with a tight supply small changes or announcements can create short term intense volitlity.

Bryce

corn was down yesterday, less than eight bucks.

hey Bryce what do you think Obama's 170 million is going to do to feeder cattle markets? I got some I might sell thur, but I could hold them a couple more weeks.

As your statement said the beef herd was around the 1950 levels already. But there is a pretty good sell off going on. I've been thinking of picking up a couple calves because their price has been dropping with so many hitting the market. It isn't that they are dumping calves, but old cows with calves at side are definitely hitting the market for slaughter, so the calves that are split off are at above average numbers. Which combined with much higher hay costs and no pasture, means prices are going down.

Alfalfa hay that last year was $80 a ton for round bales, is now $230 a ton, if you can find any. There is little or no pasture left. Plus the stalks that are out there to run cows on come winter won't be worth as much, and then if you get an early snow and they get covered you're already feeding high priced hay. A month or two ago a cow calf pair might bring $1800, while today the same pair might bring $1100 or $1200.

Of course all of this has nothing to do with the price of corn since we're talking cow calf pairs that aren't fed any corn, or very little.

I've been looking for calves now because I have some grass left, and have my hay lined up. Plus I think next spring calves will be much higher. There are a lot of older cows guys might hold till spring then when they have a calf take them to the sale barn. Split them up and sell the old cow for slaughter and the calf as a bucket calf. But with high hay prices and no pasture, I think many of those old cows will be hitting the sale now and going to slaughter. At least that is what I've seen at the sale barn the last couple weeks. There just isn't enough money in the calf to warrant feeding the cow all winter.

I think this means in the near future hamburger prices will go down a little with all the cows hitting the market. Though this may be more of a regional thing. But with higher corn and low herd levels, I see beef staying high for a long time to come, probably higher. That's why I felt it was time to buy some calves and raise my own again.

I don't think much of that was beef was it. I thought it was mostly pork, chicken, and fish. You know the healthy stuff Michelle likes.

If you have forage lined up for the next 8-12 months and grass I would be investing in calves now at the price they are at. Heifer calves could be really valuable next fall as bred heifers to calve in in 2014 once we get grass and forage back. Right now with corn so high that is what is driving down the lighter calf market as the feed lots want the least days on the lot with high corn prices so that determines the price plus those that are culling back due to low feed inventory or dispersing due to that fact. There are regions of the southeast where lots of cattle are bacgrounded each year with grass and they may be picking up some of the great plains cattle.

Bryce

I agree the 170 million was more in the above items when I read the short version. It will have some impact on prices as with limited supplies all things are tied even more tightly than normal. I don't look at them buying 170 million dollars worth of food items to feed to American youth as a real bad thing, at least not as bad as most that post on here think it is.

Bryce

Would you think 600-700 pounders would sell better than 400-500 pounders?

even with corn so high the feeder calf price is still hanging in there....had a customer sell some calves the other day, they weighed 690 lbs and still brought $950/nose. CRAZY! Mine are still out on grass and will be weaned in a few weeks. If a guy has any grass or a lot of feed the best thing to do right now is buy some fall calving cows that are bringing $1200-$1300 and are gonna calf in a month....feed the cow and calf til February and split them...$1100 for the killer cow and $600 for the calf.