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March 26, 2014

First Look at 2014 U.S. Growing Season

Now that we have officially moved into spring, let's take our first look at the 2014 U.S. growing season.

Spring Weather in U.S. Slow to Warm Up - For all of us living here in the U.S., we can't wait for winter to be over. This winter will go down as one of the coldest and snowiest in many areas of the U.S. Therefore, it comes as no surprise that there is still snow cover in many northern areas with frozen lakes and frozen soils all across the Midwest. There have been a few periods of brief warm ups, but there has not been any consistent period of warm weather thus far this spring.

When it finally does warm up, there is always the potential for localized flooding in the spring, but any potential flooding this year will be pushed back into April. A lot of the ground is still frozen so any heavy rains in early April would probably make the flood potential worse. Currently, I would assess the flooding potential this spring as moderate and localized.

The longer range forecast does not look promising for a quick warm up. If the current weather patterns persist into April, spring planting would probably be delayed 1-3 weeks depending on the April rainfall. Even under the most optimistic scenario, which would be a reversal of the current pattern to a warmer and dryer April, I think the best we could hope for would be an average start to spring plating, but I would give that a low probability.

Potential 2014 U.S. Acreage - Corn Acreage Down, Soybeans Up - April weather could be a big determining factor as far as corn and soybean acreage is concerned. Currently, I would estimate that the 2014 U.S. corn acreage will be in the range of 92-93 million acres and the 2014 U.S. soybean acreage would be in the range of 80-81 million acres.

The weather during April will be one of the key determining factors in the final acreage of corn and soybeans in the U.S. If the weather during April ends up being warmer and dryer than normal, then that would favor more corn acres and fewer soybean acres. Corn is planted first and if the planting conditions are good for corn, farmers tend to plant a few additional acres of corn. If the weather during April ends up being cooler and wetter than normal, then that would favor fewer corn acres and more soybean acres.

Having said that, I think we should also add a word of caution. Traditionally, it has always been assumed that farmers hesitate to plant their corn later than normal due to lower yield potential from late-planted corn, but that assumption may not be as valid as it once was. Over the last few years, later planted corn has yielded quite well if the summer weather was not too adverse. Most people would attribute these better than expected results to the tremendous improvements in corn genetics over the years. Therefore, farmers today are less likely to automatically switch from corn to soybeans due to delayed spring planting.

Side note - The same phenomena has occurred in Argentina for the last three years. In Argentina, farmers plant their early corn in September or October, and then they skip planting corn in November and finish planting in December and January. We had always assumed that the later planted corn would be much lower yielding, but that has not been the case at all for the last three years in a row.

2014 Trend Line Yields, U.S. Corn 163-164 bu/ac, Soy 44-45 bu/ac - Even though the corn genetics continue to improve, the U.S. corn yields have been disappointing for a number of years. Adverse summer weather has resulted in lower than expected yields since 2010. Therefore, it's hard to estimate what a trend line yield should be for the U.S. corn crop. To start off the 2014 U.S. growing season, I am going to use a trend line yield of 163-164 bu/ac for the U.S. corn crop.

If the summer weather would cooperate, the genetic potential for the U.S. corn crop is certainly higher than 163-164 bu/ac. Under ideal conditions, I would estimate the average U.S. corn yield could be as high as 175 bu/ac. The corn yield in the U.S. is highly dependent on the weather during the month of July, which is the main pollination month. During July, the key factor will be the temperatures. If July 2014 ends up cooler than normal, then that will be very beneficial for corn yields. Conversely, a hotter than normal July will be detrimental to corn yields.

Soybean yields in the U.S. over the last few years have been less volatile than corn yields. We all know that soybeans can recuperate very nicely from adverse weather earlier in the growing season if the weather during August and September cooperates. As a result, you never know what the soybean yield will be until much later in the growing season. Many times the yields are unknown until the harvest is well under way. To start off the 2014 U.S. growing season, I am going to use a trend line of 44-45 bu/ac for the U.S. soybean crop.

The nationwide U.S. soybean yield is dependent not only on the weather, but also on how many soybeans are double cropped after wheat as well as the soybean acreage in the fringe areas such as the Atlantic Coast, the Southeast, the Delta, and the far northwestern Corn Belt. These fringe areas and late planted double crop soybeans tend to hold down the nationwide yield potential. Under ideal conditions, I would estimate the average U.S. soybean could be as high as 46 bu/ac or even higher.

Expanding Dryness in Western Corn Belt needs to be Monitored - Moving beyond any potential weather problems encountered over the next month or two, one important thing we need to watch is the potential for expanding dryness in the western Corn Belt and the southern Plains. The latest Drought Monitor indicated that 37.48% of the country is in a drought and that the percentage is expected to increase in the next report. The dry areas include: Texas, Oklahoma, Kansas, Nebraska, and increasingly parts of Missouri, Iowa, southern Minnesota, and southern Illinois.

We already know about how the dry conditions in the southern Plains have resulted in deteriorating conditions for the hard red winter wheat and now the concern is that the developing dryness may impact the early development of the corn and soybean crops in the western Corn Belt.

I always hesitate to talk about dryness early in the spring because dry weather this early in the growing season is a double edged sward. Dry spring weather is actually good for rapid planting, but a lack of recharge of the subsoil moisture in the springtime can lead to moisture deficits later in the summer when the crops rely heavily on the subsoil moisture. Additionally, several good rain systems moving across the region can reverse the drying trend very quickly.

So for now, we are just going to indicate that the dryer than normal soils in the western Corn Belt need to be monitored. The areas to watch closest as far as corn and soybeans are concerned will probably be Iowa, southern Minnesota, southern Illinois, and parts of Missouri.