Ontario’s Wet Feet: 2011 Corn Supply Looks At Severe Constriction

Ontario's Wet FeetIf I ever get planting again it will be a first for me.  No, it is not like I haven’t been stopped planting before but this is different.  It has been one tough wet spring in southwestern Ontario.  What’s different for me this time around is that I’ll get back into the field, maybe three weeks after I left it, the corn might be at two-leaf stage right behind the planter.  In fact, if I can’t see my mark, I can at least look to the growing corn beside me.  It’s been that long.

When the postscript is written on the 2011 spring season, I hope it is a good story.  However, this is so difficult to walk through.  A wet late spring continues in southwestern Ontario with heavy rain continually pounding on my window.  This has put me more than a month behind in corn planting, and, in fact, for the first time in my career stop me from planting my intended acreage.  I’ve got 40-bushel soybeans stamped on my forehead.  With the surrounding farm country a land of lakes, at this point I can only hope.

Every year around the globe some farmers benefit on the backs of those who don’t.  For instance last year when the Russian wheat crop burned up, many of us here in North America received much more for our wheat than we had ever dreamed of.  There have been many other times when there have been production shortfalls in places like Argentina, when we benefit here.  However when you are part of the greater Eastern Corn Belt which has been deluged by rain all spring, being part of that group that is about to take the fall this year certainly wasn’t part of my plan.  So that sets the scene.  I hope I can get out from behind this production eight ball.

Southwestern Ontario is probably worse off than much of the rest of the province.  So yes, 2011 is certainly going to be a production challenge, but that said it certainly puts a crimp in the 2011 Ontario corn economy.  At the present time I would estimate that about 60% of Ontario’s intended 2 million acres of 2011 corn has been planted.  At the present time it is very doubtful that much more corn will get into the ground.  Simple math tells me that means about 1.2 million corn acres in Ontario for 2011.  At 140 bushels per acre that would be about 168 million bushels of Ontario supply for 2011, a little bit more than half of what we had last year.  The bottom line is, this is not enough for Ontario end-users.  Expect constricted supply into September and a very difficult rationing process after that.

I had somebody comment this past week that what ever happened to the huge supplies of grains and oil seeds that buttressed the grain markets in the 1990s and early 2000 years?  The world’s farmers have always answered the production call to produce more and more and more agricultural commodities.  However, in 2011 with wet weather in the eastern Corn Belt, drought in the US wheat belt and in Western Europe, it seems those grain surpluses are the things of days gone by.  We’ve got some serious rationing going on.

Having said that, the world is not necessarily having a constricted supply of all grains.  We have just seen a tremendous soybean crop come out of South America and our friends in Russia and Ukraine will surely be exporting wheat come this summer and fall.  Also two, for those of us mired in muddy cornfields in the eastern Corn Belt, our counterparts in the western Corn Belt have all the corn in and then some.   They have had tremendous weather conditions to plant their crops and in fact, extra corn acres are in the mix.  USDA is still projecting 13.505 billion bushels of corn for 2011/12. So at least at this point, our corn problems in Ontario are not a big deal in the big picture.

Needless to say, the big picture hasn’t formed yet and maybe benevolent weather is on the way.  As Bill Russell used to say, “that’s why they keep score”.  People used to complain that the Celtics won the championship too much and that was Bill’s answer.  The jury is still out in the Dakotas and the Eastern Corn Belt with regard to this year’s corn crop.  We know of the dire problems we have in Ontario.   There may yet be time for a late Hail Mary planting surge.  However, if you think corn markets are tight, the events of the last month might mean we don’t know what tight is.