Deteriorating Crop Conditions and Drought: 2012’s Unexpected Tuesday

    Sometimes surprises can be a great thing.  Tonight, I have just returned from a long drive to Grand Blanc Michigan.  That is about an hour and a half drive from here depending on how long the border wait is.  I went there because last week I got a call from a very good friend, Dr. Ahmed Jallala, who lives in Tripoli Libya and was a classmate of mine in graduate school at the University of Guelph.  He had called me a week previous hoping to set up a get together.  He has family in Michigan and was hoping I could make the trip.

Back in the day, Ahmed and I were very good friends.  He liked the Lakers and I like the Pistons and it just happened to be at a time when they were at each other’s throats in the NBA finals.  He went back to Libya and of course I farm near Dresden Ontario, so through the years we exchange the odd e-mail.  Then came the Libyan revolution earlier this spring and I was at wits end to see if he survived.  So getting that phone call and having dinner with him this evening was a big highlight of my year.

He told me how difficult it was during the Libyan revolution this past spring.  He told me about gunfire and the sounds of NATO bombs landing close to a military compound, which also just happened to be close to where he was living in Tripoli.  There are not too many of us that have lived through a real revolution in our lives and it was fascinating to hear my friend Ahmed tell me some of the terrible stories of how he and others survived during that very difficult time in Libya over the past several months.  It was a surprise to get the phone call from him earlier. It was so nice to get together.  You never know what is around the corner.

Of course he asked me what I have been doing over the last 22 years since we had seen each other.  He was aware that I was farming but not so quite aware about everything else I was doing.  I told him I wrote commentary on agricultural commodity markets and he was very interested in that.  And with that, I couldn’t help but think of the surprise in seeing him versus the surprise in commodity markets over the last few days.  Many of us never expected cash corn prices of over $6 for new crop and over $14 for new crop soybeans earlier this year.  Surprise, surprise surprise, at least that’s what Gomer Pyle said.

As I was getting ready to travel over to Michigan to visit my colleague Dr. Jallala, the phone rang.  It was a local elevator telling me that my $6 new crop corn standing order had been fulfilled and that I can look forward to that this fall.  I was somewhat taken aback by the call because I knew markets were very volatile and I had only made that order about 2 weeks ago.  I quickly thanked the caller and then put another standing order in for $7 corn off the combine this fall.  If I get it, it will be a surprise but the way things have been going lately who knows what might be around the corner.

All of this is good news for somebody like myself who has a tremendous crop growing in the field as of July 5th.  However, I am very sensitive to the fact that these higher prices for grains have everything to do with drought conditions in the American Midwest as well as other areas.  For instance, in Ontario there are many dry areas throughout the province and the situation is getting very critical for the crop growing in the field.  Ditto for farmers across the US Corn Belt who have been posting pictures on Twitter over the past week.  David Brown, a farmer and TV commentator from Decatur Illinois, posted one particular picture that took me aback.  He posted a picture of a huge cornfield that was completely burned up as of July 4th.  It was difficult for me to look at.  Decatur Illinois is in the heart of corn country and it was burning up like never before.  I hope rain comes soon.

We have all been there, that is, seeing our crop burn up.  I’ve seen it in 1988, 2001 and 2002 and who knows, the crop I have growing in the field this year might end up that way.  Often, in agriculture one man’s misfortune is another man’s good fortune and that is exactly happening this year as grain prices are going to new highs based on the surprise poor crop conditions in the United States.  100-degree heat and no water make for a bad combination.

Of course, what we need is another surprise.  On some unexpected Tuesday, we need the rain to come.  It surely will happen.  It likely will be a surprise.  Just like seeing my friend, Ahmed Jallala last week who survived the Libyan revolution, it might come when you least expect it.