Don’t cut back on insurance this year
As a historical climatologist, Evelyn Browning-Garriss of the Browning Newsletter checks the weather with an eye to the past and the future.
“There is enough data that we know the year-to-year weather in the Northern Hemisphere for the last 100,000 years,” says Browning-Garriss, who recently spoke at the Crop Insurance and Reinsurance Bureau’s annual meeting.
When To Plant? If the past few years have been exciting, it’s because of the ocean. “When the Pacific changes, it changes weather patterns globally,” she explains. As weather patterns shift, disaster risk and exposure increase, Browning-Garriss says. “People who want to cut back farmers’ insurance are picking a heck of a time to do it,” she adds.
The above-normal temps seen this winter in the U.S. will push eastward faster than normal, bringing earlier-than-usual planting to much of the Plains states, except for the far Northeast and South-Central zones, predicts Simon Atkins, a climate risk economist with Advanced Forecasting Corporation. It’s possible farmers out west will be two weeks ahead or more.
“Much of the central Midwest will be very volatile with wild swings,” Atkins predicts. “Many will remember the cold axis that had been so entrenched in February. Well, a ‘ghost’ of this will deliver a couple more shots of chillier than usual air over the eastern Ohio Valley and southern Great Lakes.” Atkins notes with “good confidence” there will be a late freeze or at least a hard frost, and the Great Lakes region should expect planting to be delayed by at least a good week.
The Plains will continue a very dry pattern for the most part, with far-below-normal precipitation continuing over far Northwest and far Northeast areas. “However, good moisture will be streaming up into the mid-Mississippi River Valley from the South,” Atkins adds.
The western Corn Belt will be drier than usual; the exception will be a wetter zone over southern Minnesota. In April, expect some unusually strong storms on the High Plains and Texas, Atkins advises. The Northeast will be wetter, and even the last snow will occur later than usual in New England.
Market Rally Prospects. Given the past month of cold weather patterns, odds are producers will have a checklist of concerns to monitor entering spring. There will likely be fewer prevent planting acres in northern states than in the past few years, which has led some to speculate more acres will be planted to crops, notes Jerry Gulke, president of the Gulke Group and a Top Producer columnist.
“USDA has suggested that total planted acres will be less than last year, implying unplanted acreages will likely not fall victim to moisture, but to an uneconomical decision-making process,” Gulke explains. The eastern Corn Belt planting season has faced significant delays in past years without a significant drop in yield, so Gulke thinks it’s likely producers will again see corn planting extend into the end of May. If the drought in California migrates into the western Corn Belt by July, it could suggest a problem in U.S. production is possible.
Spring is the “too-too” season, says Ed Usset, grain marketing specialist with the Center for Farm Financial Management. Fields are often too wet or dry, which affects planting.
“This anxiety gives farmers another opportunity to price their grain, not always, but there’s a tendency to get back to December highs come May and June,” says Usset, who spoke recently in Phoenix at the 2015 Commodity Classic.
As of early March, soybean prices in early March hovered around $10. He pegs the odds at 70% that soybean prices will return to $10.29 in May and June with a 50-50 chance they’ll hit $11. Finally, there is a 30% chance prices could reach the average per-bushel-cost of production of about $11.25, he predicts.
For corn, prices have gone as low as $3.67 and as high as $4.39 while trading around $4.09 per bushel in early March. Usset sets the odds of getting back to $4.39 corn by May and June at about 70%, while there’s a 50-50 shot for prices up to $4.60.
“We can make the bear case all the time, but I want to think positive that we’ll see higher prices this spring,” Usset explains. “Will we get a second chance to price 2015 grain at levels seen in late December? I think we will. My question to you is whether you’ll be ready to act.”
Look For These Weather Patterns In 2015:
Around planting, a return to December price highs
is possible for corn and soybeans.
A Cooler Pacific: The Pacific Decadal Oscillation (PDO) is an ocean current likely to bring drier weather to the Midwest through its 15- to 20-year cycle, says Evelyn Browning-Garriss, a historical climatologist. The PDO shifted in 2006 to a negative phase that boosts the chances of events such as floods and droughts.
A Warmer Atlantic: The Atlantic Multidecadal Oscillation warms the North Atlantic and speeds the Gulf Stream on a 60- to 70-year cycle. The ocean current shifted in 1995, bringing more frequent hurricanes such as Superstorm Sandy, hotter summers east of the Rocky Mountains and colder, stormier winters and spring seasons.
El Niño: The warmer ocean currents of this shorter, six- to 18-month weather cycle bring drought to some areas and rainfall to others. Although a potential El Niño evaporated in 2014, there’s still a 50% chance or better the pattern could return. A weak or moderate El Niño increases the risk of a dry eastern Corn Belt spring.
La Niña: This pattern, with its cooler ocean currents, typically brings drier conditions. “La Niña doesn’t sneak up on you,” Browning-Garriss explains. “If you see a La Niña forming, it means drought in most of the U.S.” Additionally, adds NASA, there is a slight favoring of higher-than-normal temperatures for regions such as the Great Plains.
New Tool Provides Rainfall Predictions
Producers can take advantage of a new experimental weather product available online. The tool provides maps that use a set of analog comparisons to predict rainfall across the U.S. Forecasts are available for the present up to 10 days out. The maps above show predicted precipitation totals for three periods: zero to 72 hours, 72 to 144 hours, and six to 10 days. The service is provided by the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory.