CROP AND WEATHER REPORT
For the Monthly Report Ending April 15, 2015

Spring is officially here, as we roll out another year of Fairland's Crop & Weather Report. As you know, we pride ourselves on keeping our clients informed about their farmland and the things that affect it with respect to crop production, grain marketing, government programs, land valuation, and tax information, just to name a few. We have seen the profit margins decrease recently, but there is still plenty of activity and excitement in the ag sector.

GENERAL WEATHER FOR THIS AREA: After a relatively mild winter (there were a few cold stretches, but well below average snowfall), we have experienced an unusually warm and dry spring so far in Southwestern Minnesota. After seeing temperatures reach 13 below zero in early March, the daytime temperatures reached the mid-60s to mid-70s by the middle of the month. There was very little to no snow on the ground by early March and it seemed as though the ice went off the rivers, streams, and lakes almost overnight. Daytime temperatures in April have ranged from the mid-40s to the mid-80s and are stabilizing around the mid-to-upper 60s here into mid-April.

There were only 4 days with precipitation in March, with a total accumulation of only 0.4 inches at the Southwest Research and Outreach Center (SWROC) in Lamberton. With the early snow melt and lack of precipitation, there were red flag warnings/burning bans because of the dry/windy conditions in late March and early April throughout Southwestern Minnesota. Soil moisture and drought concerns have been more prevalent in the past month because of the lack of moisture for this time of the year. Most of Minnesota is designated as being in a "Moderate Drought" according to the National Weather Service (see Figure 1). Fortunately, we did receive some much welcomed rain in the area the week of April 6th. Some areas reported anywhere from about 0.5 to 1.6 inches of rain. Whereas it is not good to see these drier than normal conditions, we have never lost a crop because of dry conditions in March. In fact, slightly drier than normal conditions in the spring generally bodes well for crop production in Southwestern Minnesota, as the old adage goes: Plant in dust and the bins will bust." Let's hope that comes true and that we start receiving some more significant precipitation after the crop is planted.
Figure 1 - U.S. Drought Monitor from the National Weather Service, April 14, 2015. Minnesota is in a "Moderate Drought" as this point.

Fortunately, when the ground froze last fall, we were right at the 47-year historical average with 5.44 inches of soil moisture in the 5-foot soil profile (see Figure 2). Therefore, subsurface moisture is still adequate, even though we are seeing that top-soil moisture has been short. As far as the frost level, the SWROC is reporting that there is still about a foot of frost about 18-20 inches deep in the soil. With the rain in early April and 70 degree temperatures earlier this week, this last frost should be about gone. Soils temperatures have varied with the warm air temps and frost underneath, but are now over 50 degrees, which allows us to start the corn planting season.
Figure 2 - Available Soil Water (inches) at the SWROC-Lamberton for the past 6 years and historical average. As you can see, we ended 2014 right at the historical average.

SOYBEANS: The USDA monthly Supply & Demand Report on April 9th estimated a carryout in the U.S. of 370 million bushels, which is much higher than the 135 million bushels on inventory at this time last year. Also weighing on the market is above average soybean production in South America, a significant increase in the US Dollar, and slowing Chinese Demand. All of these factors have had a negative effect on soybean prices. The local cash soybean price in Windom on April 15th, was $9.22 per bushel. This is much lower than $14.50 per bushel at this time last year. We did make a 10% sale in late March at around $9.50 per bushel to reach 60% sold for the 2014 crop.

The Prospective Planting Report was released by the USDA on March 31st. USDA is estimating that the U.S. will have a record 84.635 million acres planted to soybeans in 2015, which would be much more than the previous record of 83.7 million acres that were planted last year. With the carryover in the 2014 crop noted above and the projected record acres, 2015 new crop soybeans were $8.85 per bushel on April 15th. This is much lower than $11.66 per bushel that they were at this time last year.

CORN: The USDA Prospective Planting Report indicated 89.2 million acres of corn will be planted in the U.S. in 2015, which is down from the 90.6 million acres planted to corn in 2014 and the lowest U.S. corn acreage since 2010. Even though this is supportive for new crop corn price, the market was actually anticipating even lower corn acreage, so prices decreased about 20 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. Final planted acres will likely depend upon weather in April/May, fertilizer prices, and how corn prices behave in the next few weeks. Fortunately, corn prices have rebounded some since the report on March 31st. We have been waiting for new crop corn prices to strengthen and have not sold any 2015 crop at this point. We are monitoring U.S. planting progress and will likely be making some new crop corn sales yet this spring.

The April USDA Monthly Supply & Demand Report estimated that there is 1.827 billion bushels of U.S. corn ending stocks for the 2014 crop. This is higher than the USDA estimated in March. Cash corn is about $3.50 per bushel compared to about $4.50 per bushel a year ago. We made a 10% sale at the end of March at about $3.75 per bushel to reach 60%. We will be looking to make the last sales based upon price rallies resulting from weather concerns this spring into early summer.

Figure 3 - With the early spring we are experiencing, it has given us a great opportunity to get a head start in the fields this year. Because of the early freeze up last fall, we were not able to apply all of the nitrogen. Here is a producer applying anhydrous already this spring.

REMARKS: We have had an extremely busy winter processing the paperwork side of the farm operations. Since we harvested the crop last fall, we have been working diligently to order and prepay inputs, closing out the 2014 year, open the accounts for 2015, prepare the 2014 income tax information, calculate the 2015 farm projections, meeting with farm operators, complete the 2015 crop insurance signup, and completed the farm program enrollment. Fortunately, the farm program enrollment allowed all producers an opportunity to update their Farm Service Agency (FSA) base and yields, which are what future farm program payments will be based upon. Unfortunately, it took a long time to process all of the 5-year yield history and verify the acres for each individual farming unit, regardless of lease type. We were able to complete the base and yield update by the deadline in early March. The election of either Agricultural Risk Coverage-County (ARC-CO) or Price Loss Coverage (PLC) had to be completed by early April. We were able to work with all of our tenants to select ARC-CO by the end of March before the deadline. We have nearly all of our clients'eligibility forms submitted for the 2014 and 2015 crop as well and appreciate all of our clients' efforts and diligence of helping us to get this done. In June, we will be signing the FSA contracts for 2014 & 2015 crop to complete the enrollment for those two years. At this time, we are still anticipating $40-50 per acre farm program payments for both the 2014 and 2015 crops.

Overall, we are really looking forward to getting back into the field. With the lawns greening up, trees budding out, and birds making their way back into the area, spring is definitely here. Soil conditions are excellent and the seed bed should be conducive for the 2015 crop to get off to a great start. We appreciate working with you and look forward to another productive cropping year!


Figure 4 - This producer was field cultivating on April 14th. The soil is extremely mellow/in nearly perfect conditions and working up like a garden. We are just starting corn planting and hope to have most of the corn planted by the end of April.

 

GROWING-DEGREE DAYS

 

MAY 1, 2015 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 15, 2015)

 

New Vision,
Windom

Magnolia

Poet Biorefining,
Bingham Lake

MnSP,
Brewster

Cash        
Corn

         3.53

       3.53

              3.56

      N/A

Soybeans

         9.22

       9.22

              N/A

      9.40

October        
Corn

         3.56

       3.54

              3.70

      N/A

Soybeans

         8.85

       8.88

              N/A

      8.97



 

 

Rainfall (inches)
 

COUNTY

CITY

 March 15-April 15, 2015

MARCH 15 to DATE-2015

MARCH 15 to DATE-2014

Cottonwood Jeffers                 1.48                   1.48                   1.34
Cottonwood Windom                 1.70                   1.70                   1.16
Jackson Heron Lake

                1.74

                  1.74                   1.55
Jackson Jackson

                2.06

                  2.06                   2.12
Martin Trimont                 2.23                   2.23                   1.91
Murray Fulda                 2.41                   2.41

                  1.50

Murray Slayton                 1.67                   1.67                   1.22
Nobles Round Lake

                1.75

                  1.75

                  1.60
Nobles Rushmore                 1.32

                  1.32

                  1.75

Redwood Redwood Falls                 1.14                   1.14                   1.25
Rock Magnolia                 1.66                   1.66                   1.39

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










E-mail us at: fairland@fairlandmanagement.com