That's not a typo in the title of this week's column. Over the last weekend of June, some of the already drought-stricken areas in north-central South Dakota saw a damaging frost on their corn. The frost didn't hit the winter or spring wheat, but that could be partially due to the fact that there isn't much winter wheat left in the fields. At least 75% of the winter wheat in the drought-stricken areas of South Dakota has been baled or sprayed out. Some authorities have declared that at least $20 million of crops in South Dakota have already been destroyed by drought or the June 24 frost, with more losses expected. Farmers have also recently started to bale drought-damaged spring wheat.
The June 29 U.S. Drought Monitor showed that 2% of South Dakota is in extreme drought, 29% is rated in severe drought versus 18% the prior week, and the rest of the state is in moderate drought stage to abnormally dry. In North Dakota, 8% of the state is in extreme drought, 32% in severe drought, 27% in moderate drought and 33% is abnormally dry. In Montana, 48% of the state is facing some degree of drought, with 17% rated moderate, 18.4% rated severe and 6.8% rated extreme, with the ratings for these three categories growing over the past week.
Todd LaPlant, elevator manager at EGT, LLC, Glasgow, Montana, told me wheat conditions have not improved in northeast Montana (from Havre to the North Dakota border). "Spring wheat is beginning to turn this week, and anything that is up is heading, whether it's 6 inches tall or a foot tall. There is still probably 15% of the spring wheat crop that has not emerged yet. The very early planted spring wheat -- maybe 10% of the crop -- will make 20-30 bpa; the rest will maybe make 10 bpa if we don't see some rain in early July. The golden triangle is in good shape (west of Havre), but they are primarily winter wheat. Pulse crops are also in very poor shape with most peas blooming 6-8 inches tall."
Conditions are slightly better -- so far -- in south-central North Dakota, according to Allan Rohrich, who farms with his brother Mark near Ashley and Zeeland. "In our general area, crops that got a start are still hanging on," Rohrich said. "Our early seeded wheat is short but headed and is filling. I am hearing lots of talk in town of producers who are finding nothing in the heads of many fields, leading to some haying of spring wheat here in south-central North Dakota. The heat that is forecasted for next week, I am afraid, will greatly reduce what yield and quality we might have gotten if we don't see any significant moisture before it hits."
"Corn and soybeans are behind from the cold spring soil we had here. We have a decent stand of corn and soybeans, but you don't have to look very hard to find fields that are only partially emerged or some areas never came up," Rohrich said. "They are growing, and we are working on a post spray pass on them. They will need a lot of moisture and time to hit maturity. They have been liking the warm temperatures but will need moisture as well before the forecasted heat wave."
"Sunflowers were early planted for us and look very good," added Rohrich. "They are our best hope for a normal crop and may reward us for sticking with them through the wetter years. We only saw frost on one corn field and one soybean field. It did not appear to kill any corn, and most of the soybeans are coming back. Areas 10-30 miles south of us were hit much harder with frost. As with anything, we strive to have a positive outlook. We know the rain will come back, just a question of will it be a week too late."
Paul Anderson of Coleharbor, North Dakota, had this to say about wheat conditions in his area: "2017 will be the worst wheat crop for us since 1988. The early wheat did not get measurable rain until mid-June. Heads per acre and spikelets per head were set under drought conditions. Only kernel weight is yet to be determined. It looks tough 20 miles either side of HWY 83 between Bismarck to Minot, North Dakota."
Alan Klain, Turtle Lake, North Dakota, said that, "We are in the dark red on the drought monitor here. Corn and beans are holding out, but not for long." He also told me that his pasture at home had cows on it until June 1 and then dried up. His hay ground is "burnt up" and his spring wheat is thin stands and headed out at barely a foot tall.
On June 27, Tim Luken Manager Oahe Grain, Onida, South Dakota, told me, "Small grain harvest will be bleak. The corn looks much better, but many different stages in growth. I can see we will be having pollination issues in the coming weeks. On June 24, it did get down to freezing in low-lying areas, and you can definitely see what corn had frozen from Saturday night in the Gettysburg area. Talking with a few producers around here even 2 miles south of Onida in some low-lying corn fields, you can see the effects of the freeze."
Luken added, "A week ago, we did receive anywhere from 0.35 to 1.8 inches of rain, and it sure made a difference as far as pastures and road ditches. I have seen more spring (wheat) sprayed out this past two weeks and also more spring wheat fields being bailed put up for feed. What wheat will be left for harvesting will have quality concerns. Both spring and winter wheat will likely have low test weight, high protein and high shrunk and broken count. The later-planted spring (wheat) will for sure be the best if it gets rain. I will guess that 75% of the winter wheat will be lost, 15%-20% of spring wheat and what's left will yield 15-25 bushels."
MINNEAPOLIS SPRING WHEAT FUTURES SURGE
North Dakota is responsible for growing the majority of the U.S. spring wheat crop, followed by Montana and South Dakota. As the severity of the drought intensifies in those key growing areas, futures prices on the Minneapolis Grain Exchange have surged, hitting their highest level in three years, rising 34% in the month of June. The DTN Cash Index as of June 1, 2017, was at $5.33, and on June 30, it was $1.97 per bushel higher at $7.30.
This, of course, means that the cash price paid to farmers for old- and new-crop spring wheat has increased substantially, but it's bittersweet for farmers who have been watching their new crop shrivel up due to the drought. And it may not end anytime soon.
DTN Senior Ag Meteorologist Joel Burgio said in his July 2 forecast that rainfall potential in the Northern Plains during the next 10 days is "Rather limited for the region. Episodes of hot and very hot temperatures during the period increases stress to corn, soybean and spring wheat development. The most impacted areas would be in Montana and the west and central Dakotas."
So, will we get to the double-digit wheat prices we saw in 2008? By July 29, 2008, the U.S. Drought monitor showed the entire state of North Dakota in a drought, with nearly half of the state in the western portion classified as extreme to exceptional. At that time, I was buying wheat and durum at a grain elevator near Washburn, North Dakota, and quoting a flat price of $20 for wheat and $22 for durum delivered to the elevator.
Of course, some of the circumstances driving the prices that high were different at that time versus the current situation. One difference was that the 2008 drought had started well ahead of planting season, and another was that 100% of the state of North Dakota was under drought. However, USDA reported on June 30, 2017, that farmers planted only 10.3 million acres of spring wheat acres, a 45-year low and down 6% from 2016. Durum wheat planted acres were down 20%. Also, on June 29, StatsCan reported that Canadian farmers planted 15.8 million acres of spring wheat for 2017/18, 900,000 acres less than the prior estimate, and durum planted acres declined 16% to 5.2 million acres.
Given the lower acreage for 2017, it is my opinion that if Mother Nature continues to burn up the 2017 U.S. spring wheat and durum crop, there is no telling how much higher prices will go.
Mary Kennedy can be reached at firstname.lastname@example.org
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