Cash Market Moves

North Dakota Needs a Drink of Water as Drought Intensifies

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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Pictured on the left is a spring wheat field showing severe signs of drought in North Dakota. On the right is a soybean field trying to hang on, but needing water soon if it stands any chance of making it. (Photos courtesy of Mark Rohrich)

In my first drought story earlier in June, much of the focus was on the poor condition of the wheat and durum crops. While that is still the case, with both of those crops in worse shape since then, the drought is now affecting oats, barley, soybeans, corn and pastureland. Virtually anything that grows and needs water to survive is in danger.

Take a look at the North Dakota NASS Crop Progress report for the week ending July 9. Note that nearly every crop grown there is rated well below 50% good-to-excellent condition. Now, add in the extreme heat for the week ending July 16 and conditions have likely downgraded even more. (http://bit.ly/…)

The U.S Drought Monitor released July 13 shows nearly three-quarters of North Dakota in a drought, with a 6% increase in extreme drought conditions in the west versus the prior week. And it may not end anytime soon. The National Weather Service (NWS) noted near-record-high temperatures of 99 to 104 degrees Fahrenheit in western North Dakota on Friday, July 14, with Dickinson recording a new record high of 104 degrees for that day.

Mark Rohrich, Maverick Ag Ashley, North Dakota, told me that, "I'm not exactly sure where the crop is finding enough to hang on, but it's tapping all the reserve moisture in the soil. Usually we make it to mid-July, then the water shuts off, so for it to make fall crops -- corn, soybean and sunflower -- we will need more rain from here out, and I see nothing to indicate that. We still stand a chance here on good ground fields, but when we hit the wall that runs out of the (soil moisture) reserve with no more rain, it will crash. Sunflowers love heat and will tap for water deep. I know they won't be the big, giant plants they have been in recent years, that is for sure."

Rohrich said that crops are still burning up. It's worse on the hot days, he said, while the cooler days give a "whim of hope." He added, "Pastures continue to look browner. Ditches that get cut stay brown. There will be some early seeded wheat here to harvest. Some of the later wheat that looked good is taking this recent heat hard and turning areas white. The farther west you go from here to the Missouri River, things look worse. Soybean growth is slow, and you can see stress when they should be exponentially adding growth. Most corn is gray all day on warm days, sunflowers are hanging in there yet, but you can see stress on the headlands."

"We estimate wheat yields at 11 bushels per acre," said Paul Anderson of Coleharbor, North Dakota. "We just can't catch a rain. We are already selling carryover wheat seed for 2018. While there is no wheat put up for hay south of the lake from here to Baldwin, west of here there is lots of wheat rolled up in bales. And zeroed out. Protein levels will likely be elevated this year." He noted that the barley in the area is drying up and turning color and should be "nice, thin feed barley in two weeks."

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That spells bad news for North Dakota barley growers who have pre-contracted acres with malt companies. While there may be an "act of God" provision for all or part of the acres contracted, growers will still lose money on the difference between the malt price they contracted and the feed price, unless their acres are zeroed out and then insurance comes into play. The spread between malt barley and feed barley is currently over $1.25 per bushel and will likely widen even more.

As far as prices for other crops, the spring wheat cash price is skyrocketing as the drought intensifies. Even though the market saw a decline in prices the past 10 days, the DTN Cash Index still shows a rise of $1.80 since June 1 when the index was $5.38 versus the Friday, July 14, closing price of $7.18. As for hard amber durum wheat, another North Dakota crop severely affected by this drought, the cash price bid by mills since June 1 for new crop has risen by $2.45, and buyers tell me there are currently no offers.

Levi Taylor Ypsilanti of Stutsman County, North Dakota, told me that while he doesn't grow any wheat on his farm, he has many fellow farmer colleagues that do. "I can tell you the wheat in the southeast and central looks OK to average in my neck of the woods. You do not have to go too far west to start seeing some serious damage to ALL crops. Recently they opened up CRP for emergency haying in drought-designated counties. To put things in perspective, you would travel about 120 miles west of where I am at to begin seeing extreme drought conditions."

"A farmer out west told me today that he has had 1.5 inches of rain on his farm since winter turned. That farmer went on to explain that he has NEVER had to not combine anything because of drought, but unless some significant rain comes very soon, these triple-digit temps next week will certainly 'do his farm in.' As for symptoms out there, he is observing 3- to 4-foot-tall corn that will be tasseling soon with beans that are 3-4 inches tall with one or two leaves. I really feel for these folks out there," said Taylor. "Thankfully, our governor put into effect an executive order to lift regulations on cattle haulers, water haulers and hay haulers for the time being."

Taylor is referring to the order issued by North Dakota Gov. Doug Burgum signing an executive order on July 10 waiving hours of service restrictions for drivers of commercial vehicles transporting hay, water and livestock to help livestock producers battling harsh drought conditions. The order also eases weight limits for those hauling hay and water to support drought-stricken ranchers. In addition, on July 12, Burgum signed an executive order suspending the 150-mile limit on the distance that farm license vehicles can transport livestock, hay and water supplies from an operator's farm.

According to a news release from the office of the governor, Burgum also announced that, at his request, State Engineer Garland Erbele has authorized an additional $75,000 for the State Water Commission's Drought Disaster Livestock Water Supply Program. The commission re-activated the program about three weeks ago and has already approved 80 water supply projects, exhausting the initial funding of $250,000. The state engineer can authorize up to $75,000 for projects without approval from the commission, which the governor chairs.

"As for our farm in my area, we are holding in there," said Taylor. "To be frank, I was not expecting things to look as good by me as they do right now, all things considered. That mentality will only hold for so long. We have seen weather system after system come through here and not drop anything measurable. June 17 was the last measurable precipitation on our farm and we had 0.36 inch. Since July, we have seen an average high temp of 93 degrees."

"We will soon be transitioning out of the vegetative state for corn where drought stress can affect 5%-10% yield, and into the tassel and silking stage. During drought stress, we can easily shave off 30%-50% yield loss due to drought stress. It appears we are at a point where significant rain is either going to give us an average crop or a below-average crop. The soybeans have held their own the past few weeks. These hot temps have really made them pop. August rains are what always make the beans, but without more rain before then, it may be too late," concluded Taylor.

On Saturday, July 15, the National Weather Service in Bismarck, North Dakota issued this warning: "It will be hot, windy and dry Sunday; therefore, dangerous fire conditions are possible Sunday across southwestern North Dakota."

Mother Nature, if you are listening, please turn on the sprinklers in North Dakota.

Information on drought and wildfire conditions is available at www.NDresponse.gov. More extensive drought resources for farmers and ranchers are available through the North Dakota Agriculture Department's website at www.nd.gov/nddaand the NDSU Extension Service at www.ag.ndsu.edu/extension.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

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Mary Kennedy

Mary Kennedy
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