It is not often I get a peak into the backcountry of American agriculture. I’m writing this from St. Louis Missouri, after a trip through the heart of Illinois today. It was such a tough drive. No, the traffic was just fine, but the corn was not. For those of us who saw our crops burn up in 1988, we thought we’d never see another one, but 2012 makes that look like a bad dry spell. Today, as I drove through Illinois, the corn was scorched from the top of the state to the bottom.
Some of you in Ontario farm country might be saying how about us. Yes, there are some areas in Ontario, which have really been dry, extending the US drought deep into Ontario farm country. However, others areas of Ontario have been fine, with consistent rains throughout the season. However, a historic drought like the one experienced in Illinois, Indiana and the rest of the American farm belt is the big leagues. It has taken down the world grain supply big time. With the August WASDE report looming tomorrow, the world awaits to see what the USDA will say.
We’ve all seen the horrific images of drought in the newspapers or on twitter. Not all of what I saw was consistent, but it was all bad. I got a great insight into the Midwest drought east of Bloomington Indiana. I had made contact with Chad Colby, the sales manager of Cross Implement Inc of Minier Illinois some time ago. Chad had helped me with some pictures for Heritage Iron Magazine. He follows me on Twitter and is also restoring an IH 560 tractor, great stuff. On arriving in Minier, a very small place, Chad filled me in.
He said they hadn’t had any moisture. He said agronomists had been out and measured some of the cobs. Remember, this is God’s country, the best growing corn region in the world. I knew that driving through it, a horizon full of corn and soybeans. Chad told me the agronomists were predicting 120-130 bushels per acre for their corn, when usually in that country they can expect 250 bushel plus. Essentially yields have been cut in half and this wasn’t the worst part of the state.
The rest of the visit with Chad was spent looking at John Deere equipment of all kinds. At their facility, they sell new John Deere equipment but also have a paint and detailing shop for used equipment. Needless to say, everything looked beautiful, whether new or used. He shipped equipment all over the place, including Canada.
Soybeans looked like they were sucking air, corn looked done. In fact south of Springfield Illinois, I saw 4 combines in the fields harvesting corn. I also saw corn, which had been plowed under. It was a bitter harvest and one, I’m sure our US friends will not forget.
In Ontario we’ve had rain events in some part of the province and some not. I’ve pegged the Ontario corn crop at 148 bushel/acre and until recently I’ve been sticking with that. However, in the last few days I’ve heard some other Ontario guys coming in at 140 or a little less. I also heard one Ontario guy say, we’ll export corn to the highest American bidder. As you all know, I always say, I don’t know what is going to happen, but I do expect some strange Ontario corn movement this fall and winter. We’ll need to export at harvest time, especially in southwestern Ontario. How that will all work with such an acute American drought may surely make basis fickle.
Bryce Anderson, our DTN Weather analyst writes extensively about weather patterns and about everything else you might want to know about weather. In the past, I’ve often ignored his and others musings about El Nino and La Nina weather events. Needless to say, I was wrong about that and over the years I have come to respect our weather pros and their long-term predictions. Having said that Bryce recently responded to me on Twitter by telling me all signs are in place for a waning of the 2012 drought. I believe that. Even St. Louis, where I am now, forecasters are predicting a cooling down to the 80s over the next few days. They haven’t seen that since May.
So here we are. The US Midwest is scorched like never before. So there goes supply. It’s now the job of these prices to scorch demand. We’ll surely find out what USDA has to say about that Friday. As farmers, we know, weather can be cruel. My trip through the Midwest this past week is testament to that. It is not 1988 for sure. Now, we have a new benchmark.