Tag Archive for: Nebraska Harvest

,

Nebraska Harvest Wraps Up in Record Fashion

Nebraska Harvest
As farmers across the Cornhusker State park their harvesting equipment for the winter, many are feeling the satisfaction of reaping a bountiful harvest. According to the USDA’s National Agricultural Statistics Service (NASS) data for November 1st conditions, Nebraska boasted a record high 1.68 billion bushels, up 4 percent from last year. The area harvested for corn was 9.00 million acres, also up a percentage point. Likewise, the average yield forecast is at a record high 187 bushels per acre, up 8 bushels per acre from 2014.

Nationally, the corn production forecast was up only slightly from October estimates, at 13.7 billion bushels. However, this number is also down 4 percent from last year’s record corn production. Based on November 1st conditions, NASS data showed that the national yield average stands at 169.3 bushels per acre, up from last month, but down 1.7 bushels from the 2014 average.

Still, if the 13.7 billion bushel estimate is realized, it will represent the second highest yield and third largest production on record for the nation.

Nebraska farmers also brought in a mammoth soybean harvest, with a record high forecast of 291 million bushels—1 percent up from last year. Similarly, the record yield forecast stands at 56 bushels per acre, up 2 bushels from 2014.

Nationwide soybean production tells a similar story. Soybean production forecasts are at a record 3.98 billion bushels, up 2 percent from 2014. Nationwide soybean yields are expected to average 48.3 bushels per acre, up 1.1 bushels per acre from last month and up 0.8 bushels from the 2014 harvest.

Of course, record harvests also spell lower commodity prices, and despite doing well in the fields, farmers in the state and across the nation are feeling the pinch of the continued low corn and bean prices. According to the Federal Reserve Banks of Kansas City and St. Louis, farm incomes are falling at a dramatic pace, and farmland values are following suit. After three straight years of record crops and falling commodity prices, this trend isn’t unexpected.

Looking ahead, what is the best plan for farmers facing these current challenges?

According to commodities advisor and broker Al Kluis, there are 5 strategies producers may employ—with varying degrees of success. Writes Kluis:

  1. Hold it and hope:This worked one year out of the last 10. However, it has been a disaster since 2012. Many farmers in a high-equity position (meaning they don’t have much debt) typically hold it and hope. Farmers with deep pockets and big bins can afford to do this, though that still doesn’t mean they make money doing it.

What about farmers who are leveraged or who have two bad crops in a row? Hold-it-and-hope can be a fatal choice, because hope is not a marketing plan.

  1. Hold and protect: In other words, hold it all and protect the downside with put options. This strategy would allow you to wait for basis improvement, but it would require you to write out a large check for your futures account. Unfortunately, your farm finances may already be tight. Still, it may be worth considering doing this on 5% to 10% of your corn crop just so you can learn how it works.
  2. Hedge and wait:Hedge the corn and soybeans out into the spring and summer of 2016 and wait for the basis to improve, particularly if you have the corn and most of your soybeans stored at home. This is something to consider on some of your corn crop because of the large carry in the corn futures market, but it doesn’t make any merchandising sense for soybeans.

You need to treat each crop very differently, depending on your basis, carrying charge in the futures, and your local merchandising alternatives.

  1. Plan and sell:Put together a scale-up marketing plan using both price and time targets so your crop is sold by mid-July. In this plan, you would make a series of 10% or 20% sales. This type of marketing plan takes more time and effort, but it can also make the farm a lot more money. The farmers who do this are not the hold-it-and-hope type. They are a lot more involved with the grain markets each day. Remember, you are growing money – not crops. Do this on 50% to 80% of your corn and soybean crops.
  2. Sell and buy calls:Sell it all and buy call options back. This would generate a lot of cash right now and would allow you to make more money if futures go higher later. This only makes sense for the soybeans you have in the grain elevator. The cost of the call option is less than your interest and storage bill of keeping the soybeans at the elevator.

With these strategies in mind, it’s important to have a plan in place.

If you’re concerned about employing marketing strategies for your farming operation, feel free to contact UFARM for a consultation. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

Sources consulted:  Kluis, Al. “Five Strategies to Consider for the 2015 Crop.” Agriculture.com. Meredith Agrimedia. 18 Nov. 2015. Web. 19 Nov. 2015.  “Nebraska Corn, Soybean Harvests to Hit Record Highs.” CropWatch. University of Nebraska-Lincoln. 10 Nov. 2015. Web. 19 Nov. 2015.

 

Nebraska Harvest 2014 Progress

After a somewhat slow start to Nebraska Harvest 2014, favorable harvest weather allowed farmers across the state to make good gains this past week. Other than a chance of rain for northeast portions of the state midweek, the temperatures look to be above average, and farmers should be able to make further progress in the coming week, especially with corn, which is lagging behind due to high moisture content in most areas.

According to the USDA National Agricultural Statistics Service’s (NASS) weekly crop progress report for the week ending October 19th, soybean harvest across Nebraska was 69 percent complete, while corn was at 28 percent. Overall, for all reported states, soybean harvest has passed the halfway point, and corn harvest is at one third. Although good progress was made for both grains, they’re still lagging behind the average pace.

On the whole, soybean harvest stands at 53 percent complete, compared with 61 percent complete as of this time last harvest season. On average, two thirds of the soybean crop is harvested by this time. Soybean conditions for Nebraska rated 1 percent very poor, 5 percent poor, 19 percent fair, 54 percent good, and 21 percent excellent. The percentage of beans harvested stood at 69 percent, behind 77 percent last year, and the average of 81 percent for Nebraska.

Nebraska-HarvestFor corn, thirty-one percent of the nation’s crop is harvested, which is up from 24 percent a week ago but off 7 percent from a year ago, and 22 percent behind the previous average pace. For Nebraska corn, conditions rated 2 percent very poor, 5 percent poor, 18 percent fair, 51 percent good, and 24 percent excellent.

As for corn maturation, the weather allowed Nebraska’s corn to further mature, ensuring minimal damage in any areas where frost has remained at bay. Ninety-four percent of Nebraska’s corn crop was mature, near last year’s 91 percent, and slightly ahead of the long-term average of 93 percent maturation. Corn harvested was 28 percent, near last year’s 31 percent, but behind the average of 45 percent.

The DTN ag weather forecast calls for continued mostly dry conditions for the central region in the coming week to ten days—welcome news to farmers who are anxious to get their crop out of the ground. Farmers in the southeast parts of the region—especially those in Iowa and Illinois—have seen cooler temperatures and continued rains, which have stalled their harvest aspirations, so the drier weather forecast should help them surge back to a more average pace.

The sunny warm weather will also allow corn to further dry down, as corn absorbs the needed heat units to stabilize at around 15-20 percent—necessary in order to prevent stalk rot in the field and later in the bin. Farmers across the state continue to play the waiting game, weighing ease of harvest now vs. increase drying costs later, a decision that favorable weather will make easier.

Do you have questions about the harvest progress on your land? Contact UFARM for a free consultation.

 

Sources consulted: Abendroth, Lori, and Roger Elmore. “In-Field Dry-Down Rates and Harvest.” Iowa State University Extension and Outreach. Iowa State University. Sept. 2010. Web. 21 Oct. 2014. Caldwell, Jeff. “Soybean Harvest Passes Halfway Point as Weather Window Flies Open.” Agriculture.com. 20 Oct. 2014. Web. 21 Oct. 2014. “Harvest Continues with Soybean 69% Done; Corn, 28%.” CropWatch. University of Nebraska-Lincoln. 20 Oct. 2014. Web. 21 Oct. 2014.

 

,

What will El Nino hold for Nebraska Harvest?

Nebraska Harvest WeatherOver the last several months, meteorologists have been duking it out over the chances of an El Nino occurring, and the ways this could affect Nebraska harvest weather, and the winter and spring to follow.

An El Nino occurs when the Pacific Ocean surface waters warm up to above normal temperatures—usually about one degree Celsius above average. This rise in temperature alters the atmospheric pressure over the Pacific Basin, which in turn alters the jet streams over the United States. Those whose livelihoods depend a lot on the weather understand that jet streams are the driving force behind the storm systems and temperature boundaries that affect our regions. El Nino weather patterns in past years have had an impact on Midwest growing seasons and yields, so it is no wonder that farmers pay attention when such a pattern may be in the works.

How does El Nino usually affect Nebraska? While most of El Nino effects are not felt until the following calendar year, it usually means higher than normal winter temperatures and precipitation, although the effects aren’t quite as clear as they are in other parts of the country. It is generally accepted that an El Nino weather pattern is favorable for US grown crops, since in addition to slightly warmer temps and above average winter precipitation, it brings more precipitation during the summer months as well.

So, what’s the verdict? While there was a 70% chance of an El Nino weather pattern back in June, it appears that weather experts have backed off that prediction some, to just 50%. Should El Nino still develop before the year is out, it is unlikely to be a strong event. According to the Australian Bureau of Meteorology: “Despite the tropical Pacific Ocean being primed for an El Niño during much of the first half of 2014, the atmosphere above has largely failed to respond, and hence the ocean and atmosphere have not reinforced each other,” states the bureau. “As a result, some cooling has now taken place in the central and eastern tropical Pacific Ocean, with most of the key NINO regions returning to neutral values.”
Overall, Nebraska has seen below normal summer temperatures. While no one is complaining about the moisture in most areas of the state, there are concerns about replanted corn reaching maturity over the last few weeks of the growing season, as well as concerns with a potential early frost, which would obviously have adverse effects on replanted, late-planted, and long-season hybrids.

The Climate Prediction Center put out their September-November forecast on August 21, and overall, Nebraska has increased odds for above normal precipitation during the harvest months, as well as portions of the state possibly facing below normal temperatures. This brings concerns about the ability for crop maturity, as well as for drying down.

Area farmers might recall another moderate El Nino year—that of 2009-2010—and the challenges during that particular harvest, chief of which were difficulties with drying down and moist harvest conditions. If the predictions being made turn out to be true, farmers might be facing similar challenges during harvest 2014.

Do you have concerns about the upcoming harvest? Contact a UFARM land manager—they are happy to offer helpful advice for all your harvest and weather-related concerns.

United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact Us.

Sources consulted:
Johnston, Julianne. “Australians Downgrade El Nino Status to ‘Watch’.” ProFarmer. Farm Journal Media. 29 Jul. 2014. Web. 25 Aug. 2014.
Monroe, Matt. “How El Nino Will Affect Nebraska Next Year.” KMTV. KMTV Action 3 News. 06 Mar. 2014. Web. 25 Aug. 2014.
Williams, Tyler. “Nebraska Ag Climate Update.” Cropwatch. University of Nebraska-Lincoln Extension. 22 Aug. 2014. Web. 25 Aug. 2014.