This certainly has been unique harvest week for me. It has been a horrendous fall, but this week it became even more challenging. Yes, I have harvested corn among snowflakes before many times but it is rare when enough snow and cold comes and shuts me down completely. To top it off this is happening in mid-November, which is just so unusual for southwestern Ontario. Needless to say, it is very serious for the rest of the province. Much of the Ontario crop is at risk.
Simply put if you ingest snow from corn stalks into your combine it can form an ice glaze over your sieves essentially throwing corn out the back on the ground. We don’t want that. It all depends on the temperature being slightly below freezing. The thrashing of grain creates a certain amount of heat and when everything is just right combines can freeze up. That’s exactly what’s happened to me this past week plus about 6 inches of snow inundating my farm. Is been much worse across parts of Ontario as many fields of soybeans will surely be lost this year.
It has certainly caused havoc and harvest fields across Ontario. What is interesting from a pricing standpoint is Ontario corn basis has been sustained partly because of the delayed harvest and partly because of US imports coming in. Having import prices at harvest time is almost unheard of. However, you had a very late crop that has been delayed even further and end-users need to cover their needs. Add all the snow to the mix and it puts a big question mark on exactly when and if all of this Ontario corn will hit the market.
Having said all that the Ontario corn crop is somewhat suspect. This is not 1992 when we had an unmitigated disaster in Ontario cornfields. That year much of the corn did not mature. This year it was quite variable across the province. We have corn that is grade 2, 3, 4, and 5 and maybe even worse spread out across the province. Much of the corn has low-test weight, putting it into a grade 3 and 4. Yields are also down in some areas. For instance myself I yielded 185 bushels per acre on one field, which is a very decent yield. However, in a normal year this field commonly goes over 200 bushels per acre. Ditto across the province and surely into Quebec.
It makes me think the Statistics Canada corn yield for Ontario of 152 bushels per acre will not be met. I know it is hard to project the same types of conditions onto the big US crop. However, in the more northern states I would think there would be test weight issues and possibly enough damage to lower USDA yields in January. Needless to say, the many people I have talked to in the social media world of American grain analysts have told me I am wrong. The US crop is a record crop and even though the USDA reduced yield in November, it is unlikely to go any lower. So that makes the Ontario and Québec phenomenon of light test weight and lower yielding corn somewhat of a local phenomena. My assumption will be that it’ll be dealt with through basis and grade discounts.
It is kind of cruel but at the same time kind of normal. I didn’t like the fact this year I got things planted almost a month late. However, sometimes that goes with the territory when you are a farmer. It was followed by one of the coldest summers I can remember and the latest start of my fall harvest season in my career on October 27th. So if that gives me low-test weight corn, deep down it really shouldn’t be too surprising.
Of course what has helped has been the October rally in grains and the important basis for corn and the lower Canadian dollar. This has given us prices this fall that we really didn’t expect at the end of September. The focus though is still clearly on getting this Ontario crop out of the field. The forecast for next week is rain, which should melt the snow letting us mud things out. I’m fine with that, I’ve dealt with mud and harvest many times before.
There surely will be many implications from this frenetic 2014 fall harvest in Ontario. We have already seen what it is doing to our basis levels for grain. If the weather gets worse before it gets better and the Canadian winter sets in, domestic pricing might get really interesting. End-users will be scrambling, corn imports might actually increase and who knows what else that means. I’m sure we’ll even find quite a few more ruts in the field.
At the same time, our American friends don’t have as many of these problems. So that big 14.4 billion and 3.958 billion corn and soybean crop will surely way on prices. It just adds another challenge for us with crop in the field. Maybe its payback for 2012, when our US friends suffered, while we had a huge crop sold at stratospheric prices. Sometimes the road ahead on the farm can be quite challenging. We’re here for sure in 2014. Hopefully in the next few weeks, we can send this premature Canadian winter packing.