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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

This week’s USDA crop progress report shows further deterioration in crop conditions reports CME editors. As of July 8, USDA indicated that just 40% of the corn crop was in good/excellent (G/E) condition. This compares to G/E ratings of about 69% for last year and the five year average.

Comparisons are being made to the disastrous impact of the 1988 drought. The chart shows the crop ratings from that year for your reference. While we are still well above the conditions in that drought year, keep in mind that there are critical differences between this year’s crop and that in 1988. By the end of the first week in July, USDA reported that about 50% of the 2012 corn crop was in the silking stage (first kernel growth stage). It is critical that the crop receives some moisture in the next 10-14 days. Already there are numerous reports, especially from the Eastern Corn Belt, of crop failures and farmers deciding to run a bush hog through dead plants and maybe try for a late planted bean crop.

It will be interesting to see how USDA will adjust its supply/demand table for corn with this background of dismal drought conditions and memories of 1988. The planted acres will reflect the results of the acreage survey at 96.405 million acres. The harvested acres from that survey were estimated at 88.851 but that did not capture what has happened in the last four weeks and it is possible the harvested number may be lowered. In 1988, the ratio of harvested to planted was 86% vs. the 92% in the June 2012 Acreage survey. A one point drop in the ratio implies a loss of about 1 million acres.

Analysts polled ahead of the report indicated that they expect the USDA to show ending stocks for 2012/13 at around 1.2 billion bushels. This is about 600 million bushels less than what USDA published in June but it may not reflect private estimates of even larger yield losses. Ending stocks of 1.2 billion bushels are probably based on yields of around 158 bu/ acre (with only small demand changes). This is because trade thinks USDA will likely be reluctant to make bigger revisions until August yield data starts to come in.

But memories of 1988 persist, a year when actual yields declined 25% from trend. Even a 12% decline from trend would push yields below 140 bu. Acre and require dramatic feed use rationing


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