CROP AND WEATHER REPORT
For the Monthly Report Ending April 15, 2016

Welcome to another year of Fairland's Crop & Weather Report. We will continue to provide this monthly report to keep you informed about crop production, grain marketing, government programs, land valuation, tax information, and the weather, all with respect to farmland in Southwestern Minnesota. We are looking forward to another successful cropping season in 2016!

GENERAL WEATHER FOR THIS AREA: We experienced a relatively "normal" winter here in Southwestern Minnesota. We had a handful of heavy snow events (6-10+ inches), which included a couple of good old fashion blizzards (snow with 30-50+ mph winds). Fortunately, most of the snow left our area by early March, which was also one of the warmest months of March on record, with every day's high above freezing. Unfortunately, temperatures in the first 11 out of 12 days in April were below average, with several days below freezing and wind-chills in the low teens. Soil temperatures are thus below normal in the mid-40 degrees. We are just starting to observe some above average temperatures (i.e. 70+ degrees) that will be welcomed to help warm the soil to initiate corn planting. It then looks like we will be closer to the historical average going into the end of April.

As you may recall, El Nino was dominant through most of the growing season in 2015 and has continued through the spring of 2016. We received over 6 inches of rain at the end of harvest last fall and then our first snowfall right after Thanksgiving. Field tile ran well into the winter and some tile and streams ran all winter. According to the Southwestern Research and Outreach Center (SWROC) in Lamberton, we were at 5.68 inches of soil moisture in the 5-foot soil profile, just above the 48-year historical average of 4.91 (see Figure 1). We received moisture about 10 out of 31 days in March and a few small rain events so far in April. At this point, we have plenty of moisture to work with as we start fieldwork and planting the crop and would prefer for it to be drier versus wetter in the next 3-4 weeks.




Figure 1 - Available Soil Water (inches) at the SWROC-Lamberton in 2015 versus the historical average. As you can see, we ended 2015 above the historical average and that has carried over into 2016.

SOYBEANS: The U.S. soybean production was about 3.93 billion bushels in 2015, which a record national yield of 48 bushels per acre. The USDA monthly Supply & Demand Report released on April 12th, estimated a carryout in the U.S. of 445 million bushels, which is much higher than the 191 million bushels on inventory last year and well above the 92 million bushels two years ago. The Prospective Planting Report was released by the USDA on March 31st. USDA is estimating that producers in the U.S. intend to plant 82.2 million acres of soybeans in 2016, which would be slightly less than were planted last year. These figures are intentions and will change based upon movement in the soybean prices through the next month. Fortunately, the U.S. dollar has decreased versus the Brazilian currency and Chinese demand has picked up recently. There has also been some adverse weather in South America, especially some wet conditions in Argentina during soybean harvest. These factors have helped support soybean price. Cash soybean prices increased from about $8.00 to around $8.70 per bushel and new crop soybeans from about $8.00 to $8.85 per bushel since March 1st. Last year at this time, cash soybeans were about $9.25 per bushel and new crop around $8.85 per bushel. We did make a few soybean sales in the past month around $8.40-$8.70 to reach 70% sold for the 2015 crop. We have not sold any 2016 crop yet, but are monitoring closely to make the first sale, hopefully soon.

CORN: The U.S. corn production was about 13.6 billion bushels in 2015, which was 168.4 bushels per acre, down some from the record crop of 14.2 billion bushels in 2014. The big news in the corn market was the USDA Prospective Planting Report released on March 31st, which indicated that producers intend to plant 93.6 million acres of corn in the U.S. in 2016, which is up significantly from the 88 million acres planted to corn in 2015. This would be the 3rd largest corn acreage in the U.S. since 1944 and was much higher than the 90 million the market was anticipating and corn prices decreased about 15 cents per bushel after the release of the report. These are just acreage intentions, so these acres will likely change by June when the crop is actually planted. Fortunately, corn prices have rebounded slightly since the report on March 31st, but these estimates will keep a lid on corn prices in the short-term.

The April USDA Monthly Supply & Demand Report estimated that there is 1.862 billion bushels of U.S. corn ending stocks for the 2015 crop. This is more than the 1.837 billion bushels the USDA estimated in March. Cash corn is around $3.25 per bushel compared to about $3.50 per bushel a year ago. We made a 10% sale at the end of March at $3.30 per bushel to reach 30% sold and have not priced any 2016 crop at this point. We are monitoring U.S. planting progress and will be making some more cash sales and then eventually make our first new crop corn sale.

Figure 2 - Although we have had an early spring, it was cool and damp, so there has not been much field activity into mid-April. With 70+ degree weather this week, that is now changing in full force. Fertilizer application, spring tillage, and corn planting have officially begun. If the forecast holds, we should hopefully be wrapped up by the end of the month and move onto soybean planting thereafter.

REMARKS: We have continued to be very busy since our last Crop & Weather Report this past October. We were able to wrap up harvest and apply most of the fertilizer we intended to. We closed out the year and met with the farm operators throughout the winter to go through last year's performance and the plans for 2016. Certainly the status of the ag economy is front center on everyone's mind. Income was down in 2015 and is projected to be down further in 2016 and 2017. Cash flows are becoming much more challenging and there are a few farm operators who have had problems securing financing for putting in the 2016 crop yet this spring. Fortunately, we are not hearing of any major defaults by producers with respect to making their payments (i.e. cash rent/fertilizer/other crop inputs/etc.) locally or nationally. In many cases, market lows are set when it looks like it can only get worse. Our plan is to continue to stay the course and maximize crop production and minimize expense during the current downtrend to position our clients to be in position for the next more profitable cycle.

Overall, we are really looking forward to getting back into the field. Soil conditions are excellent and the seed bed should be conducive for the 2016 crop to get off to a great start. We appreciate working with you and look forward to another productive cropping year!




Figure 3 -This is a picture of the Odell Wind project southeast of Windom in March. El Nino has not been favorable for the construction of the project, as continued wet conditions have created a lot of extra variables to work around. Fortunately, the recent dry weather has allowed them to make great strides in putting up more turbines on the project, which is scheduled to be completed around mid-summer.




Figure 4 - There has been a lot of discussion/debate/interest around buffer strips (as demonstrated in the photo above along an open ditch) in Minnesota and overall interest in the Conservation Reserve Program (CRP). Governor Dayton signed into law setbacks from public bodies of water and public open ditches and there has been quite a bit of debate about requirements on private open ditches. Because of these setbacks, above average CRP rental rates, and/or the reduction in the national acreage cap, there has been a lot of interest in CRP recently. We continue to research, monitor, and advise if there are opportunities for CRP that you might want to consider.

 

GROWING-DEGREE DAYS

 

MAY 1, 2016 TO DATE INDICATED

TOTAL GROWING DEGREE DAYS

DEPARTURE, FROM NORMAL

LOCATION      
Lamberton

N/A

N/A

N/A

Worthington

N/A

N/A

N/A

 

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 (April 14, 2016)

 

New Vision,
Windom

Magnolia

Poet Biorefining,
Bingham Lake

MnSP,
Brewster

Cash        
Corn

         3.31

       3.31

              3.29

      N/A

Soybeans

         8.69

       8.66

              N/A

      8.88

October        
Corn

         3.38

       3.32

              3.40

      N/A

Soybeans

         8.86

       8.79

              N/A

      8.94



 

 

Rainfall (inches)
 

COUNTY

CITY

 March 15-April 15, 2016

MARCH 15 to DATE-2016

MARCH 15 to DATE-2015

Cottonwood Jeffers            1.88              1.88              1.48
Cottonwood Windom            2.01              2.01              1.70
Jackson Heron Lake

           1.81

             1.81              1.74
Jackson Jackson

           1.69

             1.69              2.06
Martin Trimont            2.42              2.42              2.23
Murray Fulda            1.89              1.89

             2.41

Murray Slayton            2.00              2.00              1.67
Nobles Round Lake

           1.69

             1.69

             1.75
Nobles Rushmore            1.66

             1.66

             1.32

Redwood Redwood Falls            1.91              1.91              1.14
Rock Magnolia            2.49              2.49              1.66

Klay D. Walinga
Vice President
Manager, Farm Services Department
Real Estate Broker
Accredited Farm Manager














E-mail us at: fairland@fairlandmanagement.com