Corn States Profits Hinge on Weather

May 12, 2011 09:09 AM
 
Corn States Profits Hinge on Weather

With corn prices hovering near record highs, the 2011 growing season still offers potential to be one of the most profitable. Yet, as the May 9 USDA Crop Progress Report shows, growers nationwide only completed 40% of planting compared to a five-year average of 59%.

Mike Frey farms in Brown County, S.D., the state’s No. 1 corn county, where at least half of crop acres are vulnerable to loss due to wet weather and flooding. He figures he’ll be lucky to plant half of his intended crop acres this year. “We’re having weekly meetings on how to solve the problem with several farmers and landowners getting together,” Frey says.
 
He’ll be paid federal crop insurance on 75% of his loss acres, and he’ll put 25% into the Conservation Reserve Program (CRP). But this by no means will pay as well as $7 corn, which he was hoping for.
 
Top corn producing states stand to lose $5.8 to $11.2 billion due to delayed planting caused by excessive early season rainfall, estimates WeatherBill, a national weather insurance and risk management company. WeatherBill’s analysis found that between 834 million and 1.6 billion bushels of corn are at risk across the top corn producing states as a result of planting delays due to the extreme weather – a loss of yield that could equate to between $5.8 billion and $11.2 billion, depending on how quickly planting progresses as fields dry.
 
Frey’s situation is not isolated. In five counties in his part of the state, indemnity payments made by crop insurance companies for prevented planting claims exceeded $46 million in 2010.
 
“This year, it could be as bad or worse,” says Ron Dodds, Brown County extension educator and agronomist. Half of the crop acreage in Brown County is at risk, he says. The clock is ticking, not only in getting the crop in, but the fact is, growing degree days are being lost for every day the crop is not taking advantage of the sun.
 

 

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