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Storm Exchange: Cool Temperatures to Wreak Havoc on Agriculture; Corn Yield Seen at 144 BPA
9/8/2008
AgWeb.com Editors
Cooling temperatures are going to wreak havoc on agriculture for the remainder of the growing season with the threat of an early frost greater than in years past, according to the latest research from Storm Exchange.
Storm Exchange, Inc., a weather-risk management service based in New York, said in their Fall 2008 Weather Risk Outlook that in a 90-day projection based on a combination of atmospheric climate trends, advanced computer-driven seasonal prediction models and analog forecasts, this fall presents a classic weather hedging scenario.
“For the season ahead, we see agriculture still struggling to gain traction with an increased risk of frost threatening an already unstable corn crop while that same cool weather pattern is going to drive consumers into the mall for seasonal apparel," Paul Walsh, Storm Exchange Chief Strategy Officer, said in a press release. "This cooling trend will be set against the backdrop of a very active hurricane season that will continue to drive price volatility in the energy sector.”
The Storm Exchange corn yield estimate stands at 144 bushels/acre. This number represents a 6% cut below trend and a sharp reduction from the USDA’s August monthly prediction of 155 bushels per acre.
The drop is attributed to delayed planting across the Corn Belt caused by the severe flooding that occurred in the Spring 2008, according to the Storm Exchange report. The flooding permanently impacted 10-12% of US corn, meaning that bumper crop yields would be needed to make up the difference, Storm Exchange analysts say.
It also means that the corn will require an extended warm growing season to mature safely before the first fall freeze. In Iowa, the likelihood of a severe freeze is 30% higher than historical average, according to Storm Exchange research. Across the corn-growing region of the U.S., approximately 15-25 percent of the U.S. corn crop is at risk of frost damage.
"With the crop going in the ground so late and not maturing quickly enough, we now have the double jeopardy situation of immature corn and cold weather on the horizon,” Gail Martell, Storm Exchange Senior Agriculture Analyst, said in a Storm Exchange statement. “Whether we encounter freeze damage or not, there is simply no avoiding the fact that shallow kernels will develop in late-maturing corn with cool temperatures that hinder ear-filling.”
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