For the Monthly Report Ending October 15, 2014

GENERAL WEATHER FOR THIS AREA: Fall is in full force in Southwestern Minnesota with fall colors and harvest. Temperatures have ranged significantly, which is typical for this time of the year. Daily highs have ranged from 45 to 84 degrees and daily lows from 26 to 61 degrees. Last month, we reported some patch frost...this month we are reporting that we have received at least one killing frost throughout the region and some areas have frozen more than once. The first frost in mid-September hurt some yield potential...the more recent frost help aid crop dry-down. Another thing that is aiding dry-down is the windy weather that we have had on the prairie. There have been many days of 10-20+ mph winds during the past month, which again is just what we need.

Overall, there has been limited rainfall during the past month. Despite this, the Southwest Research and Outreach Center (SWROC) in Lamberton is reporting that soil moisture in the 5 foot soil profile is at 6.25 inches, which is well above the historic average of 4.12 inches at this time of the year.

Figure 1 - This picture is the start of the soybean combining season. The stalks have some moisture in them, but there is still a lot of dust throughout the fields.

SOYBEANS: Soybean harvest began in our region around September 25th, and will be wrapping up within a few days. The harvest was actually relatively orderly this fall, as the early maturity soybeans (1.4-1.7) were ready first, then the mid-maturity (1.8-2.0), and finally the later maturity (2.1-2.4). It seemed like early maturity soybeans had the best yield potential this year, as they were probably the least affected by the patchy frost on September 13th. Unfortunately, the frost had a significant impact on the final soybean yields in certain corridors. Our initial assessment of 0-25% was not too far off, but there were probably more areas that had frost damage than initially anticipated. Yields have been variable and ranged from 35 to 60+ bushels per acre. Nationally, USDA reported on October 14th, that soybean harvest is at 40%, which is down 13% from the 5-year average at this time of the year.

Figure 2: Most of the producers that we work with utilize semi-trucks to haul the grain to the elevator. Each trailer holds about 900 bushels.

CORN: For the most part, we made it to the finish line with the corn before a killing frost. Most corn was not impacted by the frost on September 13th and reached full maturity by the end of September. When corn reaches this point, it is about 30-32% moisture. With the relatively warm and windy conditions this past month, corn moisture is coming down to a certain extent. Currently, corn moisture ranges from 20-30%, depending upon maturity, planting date, soil types, and impact of any frost in the vicinity. Nationally, USDA reports that corn harvest is at 24%, which is behind the 5-year average of 43%. There is some initial harvesting in the region, but we anticipate that most producers will wait until around October 20th, to begin and will likely take about a month to complete. We are still optimistic that overall, corn yields will be above average.

Figure 3 - Producers are just starting to open up some corn fields. Most will begin harvesting corn in earnest week.

REMARKS: National corn and soybean production estimates continued to rise in the USDA Monthly Supply & Demand Report released on October 10th. Nation corn yield is pegged at a record 174.2 bushels per acre (bu/acre), up another 2.5 bu/acre from the USDA estimate in September. This would result in a 14.475 billion bushel corn crop. The national average last year was 158.8 bu/acre. USDA estimated soybean production at a record 47.1 bu/acre, up 0.5 bu/acre from the estimate in September. This would result in a 3.927 billion bushel crop. Last year, the U.S. soybean production was 3.3 billion bushels, or 44.0 bu/acre.

Hopefully we are seeing the harvest lows with respect to grain prices. Cash soybean prices bottomed out at $8.50 per bushel on the first of October and have climbed to about $9.00 per bushel. Soybean prices for the 2015 crop (October 2015 delivery) have also cleared $9.00 per bushel. Cash corn has bounced off of the lows of $2.70 per bushel to about $3.10 per bushel and corn prices for the 2015 crop (October 2015 delivery) are around $3.50 per bushel. With corn harvest just beginning, we could see corn prices retreat again in the next 30 days, but hope they will hold. Whereas these prices are not very profitable with respect to today's expenses, it would be nice for the outlook if the harvest lows are in for both crops.

As we have mentioned in various correspondence, there is certainly some concern and anxiety in the ag sector with respect to net farm income for the 2014 and 2015 crop. Fortunately, the past several years have been extremely good, which will support things in the short term. That being said, there is not many crop input costs softening (i.e. seed and fertilizer) or resources needed to raise a crop (land rent, equipment costs, and fuel costs) for the 2015 crop. For many producers, they will be locking in a loss for the 2015 crop well before it is even planted. Of course, a lot could change with grain prices and crop production by the fall of 2015. Also, as mentioned last month, there is a lot of unknowns with how the farm program will work through this down cycle as well.

We continue to work with each of our clients to help them manage their net farm income and tax planning through the balance of 2014 into 2015. There are many variables to factor in and each situation is different. Overall, we are still applying fertilizer this fall in many cases, as there are many sources indicating that fertilizer prices will not be any cheaper in the spring. However, we do have a few farms where we will be moving the fertilizer application to the spring to try to just see if we can obtain cheaper fertilizer prices and if we can reduce fertilizer rates. The trade-off in doing this is the timing of the spring fertilizer application with respect to planting timely. We will also be working with seed vendors more in the upcoming months to determine varieties that have performed well and finalize prices. With the dramatic swing in net income and the delay in harvest and so many unknowns, it will definitely be challenging wrapping up year end in 2014. That being said, we have already begun that process with our clients and will continue to be in contact as more information becomes available through harvest.

As always, if you have questions or need clarification, feel free to call us.

Figure 4 - Fertilizer is being spread after the soybean harvest is completed.








September 30, 2014








Corn Growing Degree Days are calculated by subtracting a 50 degree base temperature from the average of the maximum and minimum temperature for the day. The daily maximum is limited to 86 degrees and the minimum is 50 degrees.


Grain Markets (October 15, 2014)


New Vision,


Poet Biorefining,
Bingham Lake


Current Crop        










January 2015        












Rainfall (inches)



 September 12 to  October 14, 2014

MARCH 15 to DATE-2014

MARCH 15 to DATE-2013

Cottonwood Jeffers                 1.32                  23.34                  19.86
Cottonwood Windom                 1.75                  24.76                  19.20
Jackson Heron Lake


                 19.62                  23.30
Jackson Jackson


                 24.23                  20.25
Martin Trimont                 2.59                  28.53                  20.73
Murray Fulda                 1.11                  24.76


Murray Slayton                 1.98                  25.36                  23.41
Nobles Round Lake



Nobles Rushmore                 1.22



Redwood Redwood Falls                 1.49                  22.42                  19.56
Rock Magnolia                 1.20                  28.92                  24.01

Klay D. Walinga, AFM
Vice President
Manager - Farm Management Department
Real Estate Broker

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