Many farmers across the Midwest are facing bleak corn yields. Market expert Jerry Gulke is one of them.
This year, it’s been hard to find farmers who are optimistic about this year’s corn crop. Read AgWeb Crop Comments, and you’ll read how corn hasn’t pollinated and yield are dropping as quick as temperatures are rising.
On Wednesday, USDA analysts chopped the projected corn yield to 146 bu./acre, down 20 bu. from earlier projections.
"USDA surprised even me," says Jerry Gulke, president of the Gulke Group. "I thought we would be looking at somewhere around 150 bu./acre, but they took an ax to it and dropped it 20 bushels per acre."
Weather, of course, is the driving factor behind the low yield expectations.
In the Corn Belt and Midwest, extremely dry conditions and near- to above-normal temperatures are maintaining severe stress on reproductive summer crops, according to USDA's Joint Ag Weather Facility.
During the weekend and early next week, heat will persist on the Plains and intensify across much of the East and Midwest. Several days of 100-degree heat can be expected on the central Plains, and triple-digit readings may briefly return to the upper Midwest. During the next 5 days, little or no rain can be expected on the Plains and across the driest areas of the southern and eastern Corn Belt.
Gulke says the stressful weather has been causing crop condition trend to fall. "We aren’t to 1988 levels for crop conditions yet, but we’re headed that way. I’ve been watching my crop deteriorate from what I thought was a record crop four weeks ago, down to 40 bu./acre or zero."
The state of the corn crop is astonishing, Gulke says. Crops look good from the road, but upon further inspection the ears have little yield potential. "We’re not seeing a 10% reduction, it’s more likely 40% to 50% reduction in some places."
Gulke says there are some people he trusts that are expecting around 130 bu./acre. "You plug that into the supply and demand equation, and that’s not just a problem – it’s a catastrophic event for our end users, livestock, ethanol and exports."
Drought Destroys Demand
In addition to lowering corn yield expectations, USDA also lowered demand expectations. "They had to lower demand, and I doubt demand will get better under these circumstances," Gulke says. "This is a forewarning to livestock producers – don’t plan on expanding."
Gulke says his fear is that the U.S. will liquidate cow herds and sow inventory to a point that permanently disables demand. "So when we do have a crop, we won’t have demand to sustain it. That’s a pretty bleak outlook."
This situation, Gulke says is a risk manager’s nightmare. "I may have the worst crop of my lifetime, and it all changed in a matter of four weeks. It’s hard to react that fast. Earlier this year we all knew we were going to $4.50. But, when things change you have to change your attitude."
Listen to Gulke’s full audio analysis:
For More Information
How do your crops look? Submit your report to AgWeb Crop Comments.
Visit AgWeb’s Market Center.
Check your local forecast with AgWeb’s Pinpoint Weather.