Fasten Your Seat Belts
If you are an air traveler, you have probably experienced turbulence. The '23 growing season to this point has been one of the bumpiest rides in recent memory. Thankfully, our cockpit crew has remained calm and kept the flight on course.
With rain in the forecast, Ben and Donavan planted nonstop through the night of May 11th. The last 10% of corn acres remained to be planted. Dale McCarthy, neighbor, and exceptionally meticulous custom planting service provider had planted the Flat, our 300 bu yield goal field the prior day. It started raining on Friday the 12th and by Sunday, up to seven inches had fallen in a three-mile radius around McIntire. Freshly worked ground becomes extremely hard after pounding rain and excess moisture. Hesitant to throw in the towel on getting acceptable emergence, we waited two weeks before ripping up the Flat and another 300 acres, replanting with 98-day corn.
Not only had we set aside the most expensive, plot topping, high yield variety for the Flat, we also applied extra fertilizer and experimental additives in our quest for a record. Ironically, we intentionally waited till early May to plant this field so the ground would be warmer, hoping for faster emergence. As they say, Mother Nature bats last.
Speaking of Mother Nature, following the May 12th deluge, she apparently decided we had received enough rain for the next couple months. Despite a consensus among forecasters that El Nino would bring normal rainfall, many farms have received less than .35" and none more than 2.5" since May 15th. Soils in North Iowa hold water exceptionally well, oftentimes too well. However, a lack of rainfall can create issues even when subsoil moisture is adequate.
Side dressing urea post emergence is a practice we have adopted as the most economical, efficient, and sustainable way to ensure nitrogen is available to the plant when needed. The downside of this method is you need at least .25" of rain to dissolve and stabilize the prilles from evaporating. Despite no rain in the forecast, we proceeded with the belief that rain would fall in time to incorporate the fertilizer and provide some benefit to the crop. Based on our network of rain gauges (radar-based rainfall data is highly suspect) it appears this occurred in most but not all locations.
The corn belt in general experienced favorable weather up until late May. The price of new crop corn had dropped over $1/bu since January. At a $4 something price, high yields and disciplined cost control are needed to cover costs. By early June, however, the market started to worry about the widespread lack of rain. The price of Dec corn increased $1.40/bu in the course of three weeks, reaching $6.35/bu by late June.
Weather markets are like fireworks. They take off with tremendous enthusiasm and promise before reaching a euphoric crescendo and crashing back to earth. As a marketer, you live for these situations. Yet, it is incredibly difficult to know when to pull the trigger. How long will the rally last and how high will it go? You don't want to miss the party and at the same time, you can't afford to be overconfident. Under extreme conditions, yield potential is declining by the hour. Given our experience that markets overreact and these opportunities can be short lived, we stuck with our plan. Since hitting its peak on 6/23, new crop corn has dropped back under $5. Volatility is the new normal.
As of today, our flight to harvest is at the halfway mark. Corn will tassel in the next few weeks. Fungicide application follows. The final result will be determined by growing conditions. A record crop is not possible, but it could still be good. We'll pilot the craft to the best of our ability and hope for a safe landing.
Jim