Home Ken's Commentaries Ken's Commentary – July 26, 2012: Roger Elmore on the drought

Ken's Commentary – July 26, 2012: Roger Elmore on the drought

“At what temperature will this stuff start to pop?” That was my
question of Dr. Roger Elmore, ISU Corn Specialist, after reading his
article on expected drought damage to this year’s Iowa crop.

As of July 15, he projected yield to fall by 11 to 43 percent. His worst-case scenario may be the likely outcome as rainfall totals last evening
were far shy of farmer’s hopes:

SHENANDOAH MUNI (SDA): 0.65
CLARINDA (ICL): 0.49
FORT MADISON (FSW): 0.48
CRESTON (CSQ): 0.47
MOUNT PLEASANT (MPZ): 0.33
MUSCATINE (MUT): 0.24
ANKENY (IKV): 0.19
KEOKUK MUNI (EOK): 0.18
CHARITON (CNC): 0.17
FAIRFIELD (FFL): 0.14
Osceola (I75): 0.13
WASHINGTON (AWG): 0.12
RED OAK (RDK): 0.1
Oskaloosa (OOA): 0.1
MONTICELLO MUNI (MXO): 0.09
Knoxville (OXV): 0.07
INDEPENDENCE (IIB): 0.06
CLINTON (CWI): 0.05
PELLA (PEA): 0.03
NEWTON MUNI (TNU): 0.01
Grinnell (GGI): 0.01
OELWEIN (OLZ): 0.01

Sourced from Iowa Mesonet and provided by Rich Balvanz with AMS
Commodities. Balvanz has projected the daily loss to be 100,000,000
bushels over the past two weeks! Two billion bushels down from the last USDA estimate and little hope in sight for the crop to stabilize. The August 10 crop report from USDA may well go to ten billion, he says, falling from the projected record 14.8 billion at the end of March.

The drought is going to have many unforeseen consequences. Right
now the renewable fuel standard is being challenged by livestock
groups. National Public Radio featured it on Morning Edition today.
The livestock industry is calling attention to the mandate for 13.2 billion
gallons of ethanol to be purchased by the petroleum industry to blend
with gasoline. The NPR story wasn’t negative but questioned why “fuel
trumps food” in government policy. The story concluded with EPA
having until November to decide if the policy caused “harm” and would
modify it for 2013.

You can sell corn for $8.00 for December delivery at Cargill-Eddyville in
last evening’s report. The number of farmers that will do so is likely to
be small as there is great fear of growing less than is sold and having
to buy back bushels at a high price. Most are just keeping quiet and
waiting for a crop insurance payment.

The Agribusiness Association of Iowa is hosting a “Drought Update” on
August 15 in Ankeny. Dr. Charles Hurburgh will evaluate the condition
of the grain and whether there is likelihood of aflatoxin in the kernels
or storage problems with the drought stressed crop.

Today on the Agribusiness Report (WHO-TV 12:50 pm) we will talk with
Iowa Agriculture Secretary, Bill Northey, on the prospects for soybean
production. Is that resilient crop also going the way of corn?

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