Record-breaking heat over an extended period of time has trimmed the prairie crop dramatically. A record heat wave is bad enough when the soil has decent moisture. Where soil moisture was marginal, production potential has been severely reduced.
Even in areas where moisture has been limited, the crop was looking pretty good. Then the potential was dashed with temperatures that peaked around 40 C. In a matter of days, crops withered and browned. It’s rare to see crops go downhill so quickly.
Of course, the driest areas have been hit the worst, but the damage also varies by soil texture, seeding date, crop type and cropping history. Analysts will be working overtime trying to determine the outlook for overall crop production, but this could be one of the poorest prairie crops in a long time.
There will be regions with average and even above-average crops and the shortfall won’t end up as devastating as the drought of 1988 or the short crops of the early 2000s, but it will still be a major economic hit.
Rain would still improve crop potential, but many scorched, shrivelled fields have limited ability to respond. On the other hand, a continuation of hot, dry weather will take a toll on crops that still have reasonable potential.
Many fields in hard hit areas are unlikely to see a combine and the ones that do could be destined for some single digit bushel per acre yields.
You can’t control the weather, but many producers will be kicking themselves for locking in new crop prices. On many crops, production contracts are available for the first 10 bushels per acre with an Act of God clause. If you can’t grow the 10 bushels per acre, you aren’t on the hook for it.
Of course, when signing these contracts, the assumption is that you’ll grow 20 or 30 or 40 bushels an acre. Having a price locked in on the first 10 bushels can seem like a good idea. Now that yields look meager and prices remain strong, it’s easy to regret contract commitments.
Deferred delivery contracts without an Act of God clause are another kettle of fish. If your production drops so low that you can’t fulfill your contract obligations, you could be faced with a cost to buy yourself out of the contract.
With parched pastures and poor hay yields, cattle producers in the hard hit areas will be scrambling for feed. Expect high hay prices and more cows than usual going to market.
Crop insurance agents will be busy. The first wave of activity will be producers wanting to switch crops to alternative uses, in other words cutting and baling crops or turning them into silage.
Crop loss claims will be numerous. The significant surpluses built up in the programs will be trimmed. For producers who chose not to enroll in crop insurance, this could be a year to regret that decision.
Expect fungicide sales to be down sharply and fewer producers are likely to top up their hail insurance coverage. Sales of new grain bins will ebb.
With strong grain sales and good movement, the carryover of grain into the new crop year will be low. Bins have been swept clean to take advantage of strong old crop prices.
Low carryover, combined with lowered production for 2021, will mean less pressure on grain handling and transportation. Expect the string of grain export records to end because the grain just won’t be available.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at firstname.lastname@example.org.