Evening Report -- July 12, 2012

July 12, 2012 09:57 AM
 

83% OF MIDWEST COVERED BY DROUGHT... The drought's footprint grew by eight percentage points across the Midwest in the latest week, according the National Drought Monitor, as 83% of the country's midsection is now covered by some form of drought. Last year at this time, just 3% of the Midwest was under drought. Indiana is especially worrisome as nearly one-third of its area is covered by "extreme" drought. Meanwhile, 94% of the High Plains (Dakotas, Nebraska, Kansas, Colorado and Wyoming) is covered by drought and there's little rain the forecast for the region. Click here to view related maps.

 

NOT MUCH RAIN IN MIDWEST FORECAST... Meteorologist Gail Martell of MartellCropProjections.com says the strong cooling that was in the forecast for the Midwest this week didn't materialize, which is characteristic of a drought. Additionally, she says midday weather models show just 0.10 to 0.75 inch of rain for the Corn Belt over the next five days.

Martell says this season's Midwest temps are a virtual match with 1988, but this year has seen more rain. "Without extremely heavy rain, yield damage will grow steadily worse," she says. "Rainfall deficits have reached 3-4 inches in the Midwest in the recent 30 days, indicating very severe drought, with 40-50% of normal rainfall."

USDA meteorologist Brad Rippey on USDA's website this afternoon said: "During the next several days, a deep pool of atmospheric moisture over the southeastern U.S. will continue to focus drought-easing rainfall in that part of the country. Additional rainfall totals of two to four inches can be expected from the western Gulf Coast region into the Tennessee Valley.  However, very little rain is forecast to spread north of the Ohio River, which will continue to leave much of the Corn Belt in desperate need of moisture. Some late-week rain will occur across the upper Midwest, although totals will be generally less than an inch. During the next several days, high temperatures above 90°F will be common across the Midwest, and readings may approach 100°F in the southern Corn Belt."

 

NWS 6-10 DAY FORECAST WARM... The National Weather Service forecast for July 18-22 calls for above-normal temps across the Corn Belt, with the highest probability of warmth stretching from the Dakotas across southern Minnesota and into Iowa. Warmer temps of course raise moisture requirements, and there simply isn't enough moisture in this forecast to improve crop ratings. The forecast calls for below-normal precip across the Dakotas and Nebraska, with above-normal precip expected in Ohio. Normal precip is expected across Iowa, Illinois, Missouri, Minnesota and Indiana. Link to related maps.

 

USDA EXPORT DATA SHOWS NO MAJOR FALLOUT FROM BSE ANNOUNCEMENT... According to data from USDA and compiled by the U.S. Meat Export Federation (USMEF), May was the strongest month of the year for U.S. beef exports at 95,211 metric tons (MT), although this tally was down 13% from year-ago. USMEF officials say this shows there was no major fallout following the April 24 announcement of the fourth BSE case in the U.S., as May was the first month in which any BSE-related decline could have been detected.

U.S. pork exports in May were up 3% from year-ago at 186,809 MT. For the first five months of the year, pork exports are 6% ahead of last year's record pace and beef exports are down 10% from year-ago. Click here for more.

 

FARM CREDIT SERVICES REPORTS WESTERN CORN BELT FARMLAND VALUE GAINS... The value of western Corn Belt farmland rose 6% to 16% the first half of 2012, according to the semi-annual appraisal update of benchmark farms conducted by Farm Credit Services of America (FCSAmerica), Omaha, Nebraska. FCSAmerica's appraisal team conducts regular appraisal updates on Jan. 1, and July 1, of 65 benchmark farms within its service area of Iowa, Nebraska, South Dakota and Wyoming. The firm found the value of its 21 benchmark farms in Iowa rose 6.2% from January to July; its 19 Nebraska farms saw a 16.3% rise; its 23 South Dakota benchmark farms rose 12.9%; and its two Wyoming benchmark farms rose a modest 1.1%. Click here for more.

 

HOUSE FARM BILL CRITICS... While farm bill stakeholders welcomed forward progress on the House farm bill, the markup cleared by the Ag Panel drew criticism. For one, USDA Secretary Tom Vilsack says the deep cuts to food stamp funding ($16 billion vs. $4 billion in the Senate-passed version) would "deny much-needed food assistance to 3 million Americans."

The National Corn Growers Association also expressed disappointment the House's bill "does not include a more viable market-oriented risk management program." The House farm bill is seen as being more balanced for Southern producers, whereas the Senate-passed version is more of a one-size-fits-all bill that heavily favors Midwest corn and soybean growers.

While House Speaker John Boehner (R-Ohio) commended the committee and its leaders on their progress and acknowledged reaching an agreement is no easy task, he did take issue with its dairy component. The Hill reports he said, "We've got a Soviet-style dairy program in America today, and one of the proposals in the farm bill would actually make it worse." He also said no decision has been made about bringing the measure to the floor.

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