Like a firecracker on the 4th of July, corn and soybean prices are set to explode. Continued hot, dry weather across a widening area of the Corn Belt is fueling the fire. The July 2012 corn futures contract traded at $7.01 on Tuesday July 3 and July soybean futures traded at $15.48 per bushel.
Knee-high by the 4th of July is an old adage from decades ago that used to describe how far along the corn crop had to be by Independence Day to make a good yield. This summer on July 4th corn was well-beyond that stage, as many fields in the Corn Belt were already tasseling and silking. The problem is they are running out of water and dying in areas south of Iowa. The severe drought area includes most of Missouri, and it stretches from central Illinois down through southern Illinois, the southern half of Indiana, and into Kentucky and Tennessee and part of Ohio.
So far, Iowa crops are in better shape than neighboring states to the south and east. In Iowa, however, farmers in the south central, southeast, central and east central regions have crops that are thirsty and there's little or no reserve moisture in the subsoil. Farmers are comparing this summer's dry conditions and 90 to 100 degree temperatures to the summer of 1988, the last time severe drought ended up blistering a large part of the state.
Chance of getting a big U.S. crop in 2012 is withering away
Iowa State University Extension climatologist Elwynn Taylor released results of his new analysis of the drought situation on July 3. He conducted a special study of conditions in key crop reporting districts in major crop producing states across the Corn Belt. His analysis indicates a very real possibility of a U.S. corn yield average this year that, based on current conditions, looks like it could be significantly below the trend line.
Taylor notes that water stress begins at 86 degrees Fahrenheit, according to 10-year-old research on corn in the Midwest. He says this is better stated as: "At temperatures above 86 degrees F, corn plants reach the early stages of moisture stress more than 50% of the time. This does not apply to irrigated crops. Specifically, it applies to non-irrigated corn in the Midwest."
Critical point numbers show when plants begin to be stressed
Taylor continues, "In a year with ideal moisture, a perfectly healthy corn plant in prime soil does not begin to experience water stress until temperatures exceed 92 degrees F, and perhaps not then if humidity is high. Still, 86 F is the average and because the government (climatologists with the National Weather Service and scientists with other government agencies) tends to work with the average, the average was set as the upper bound for the U.S. Corn Growing Degree Day and as the lower bound for water stress. The number is rarely the exact switch-over point, but it is 'good enough for government work.' Because we have the government's critical point numbers, we can use them to make some predictions—while remaining keenly aware of the limitations."
'Stress Degree Day total' can be used to predict corn yield
Looking at average Midwest corn yields over the past 30 years, Taylor notes that when the Stress Degree Day or SDD (based on temperature exceeding 86 degrees F) total exceeds 140, it is tough to find corn yields above the trend line.
How does the 2012 corn crop stand in this regard as of July 2? "A sample of what's going on in the Corn Belt gives us a hint," he says. "Most states have nine crop reporting districts. District 5 is the most central of the nine in most states. District 5 is not necessarily the best district to represent the crop conditions for an entire state. I simply chose it as an example."
Regarding the reports of July 2, 2012, the SDD totals since May 1 are: North Dakota, 13; South Dakota (District 7) 65; Minnesota, 28; Wisconsin, 62; Michigan, 33; Nebraska, 170; Iowa, 87; Illinois, 103; Indiana, 118; Ohio, 82; Kansas, 360; Missouri (data missing), and Kentucky (District 2) 160.
U.S. corn yield trend is about 161 bushels per acre for 2012
With the exception of the Northern Corn Belt (North Dakota, South Dakota, Minnesota, Wisconsin, Michigan), Taylor says it is likely, according to National Weather Service outlooks, that the remaining eight Corn Belt states will accumulate SDD well in excess of 140.
"Only under extraordinary conditions could we expect all of them to exceed their trend yields for corn in 2012," says Taylor. "The U.S. corn trend yield is about 161 bushels per acre for 2012, according to USDA's National Ag Statistics Service (see the yield chart accompanying this article). Should the eight other major corn producing states of the Corn Belt fall below their trend yields, it becomes likely that the U.S. yield average for corn in 2012 will also be below the trend."
The 2012 U.S. Corn Yield Trend, as estimated from USDA records back to 1981 is about 161 bushels per acre. The trend is the "best" straight line through a 30-year record extrapolated to the subsequent year. Chart source: http://www.nass.usda.gov/Charts_and_Maps/Field_Crops/cornyld.asp
The accumulated Stress Degree Days through June 12, 2012, for Washington, Iowa was near 30 (see graph accompanying this article). "This early accumulation was a hint of things to come," says Taylor, "in that it was significant and began accumulating rapidly at about the same time the SDD accumulation began during the disastrous crop year of 1988. In both cases, the accumulation by June 12 was not an indication of crop loss as of that date, but in 1988 it did show the trend of things to come."
This graph shows Stress Degree Days at Washington, Iowa, for May 1 through June 12 for the years of 1988 (severe drought year), 2004 (record high crop yield year) and 2012 (current year). The graph indicates the SDD buildup in 2012 began about the same date as in 1988, but temperatures in 2012 were to date less severe than in 1988. Total SDD at this location in 1988 reached 650 by mid-August. Graph source: Elwynn Taylor from http://mesonet.agron.iastate.edu
How to figure the "Stress Degree Days" total for your farm
"Farmers who are concerned about the SDD accumulation at their farm may find the Iowa Mesonet of benefit to them," says Taylor. To use the Mesonet, position your computer browser to www.mesonet.agron.iastate.edu, then click on "Ag Weather" and click on "single site graphs."
"Farmers using this online tool throughout the Corn Belt can locate a site that is representative of their area," he notes.