The US Department of Agriculture said that more acres of corn have been planted this year than any year since 1936. From the article:
“About 97.379 million acres (39.4 million hectares) were planted, up from 97.282 million forecast in March and 97.155 million last year, the U.S. Department of Agriculture said today after surveying farmers this month. The average estimate of 34 analysts in a Bloomberg News survey was 95.431 million acres.
Corn supplies on June 1 in the U.S., the biggest producer, fell 12 percent from last year to 2.76 billion bushels, the lowest since 1997, after the worst drought in more than 70 years cut production to a six-year low in 2012, the government said today in a separate report.”
Farmers have been inundated with so much rain in the planting season months that just 54% of the Iowa corn crop is rated good or excellent as of last week. The 10-year average of the state crop is 74%, which is raising concerns given that the planting season recently ended.
Nationally conditions are improving following a recent rush by farmers to complete corn planting to beat crop insurance deadlines. As of last week, 65% of the U.S. corn crop is currently rated in good or excellent condition, down 3% from the 10-year average.
So that’s clear as mud, right? I think we’ll see a solid harvest and with each passing day, the harvest looks like it could require some drying.
I’ve spent a lot of time this week speaking with folks & farmers in Iowa, Illinois and Indiana. Several of my co-workers have done the same. I grew up in Iowa and Illinois and agriculture put the food on my family’s table. I speak often with my father who was an energy manager for the better part of the last 30 years in Illinois and Iowa and who just finished driving across the state of Iowa from the Southeast corner into South Dakota, looking at the corn crop. Here’s my thinking pursuant to grain drying on June 28th:
-The delayed planting increases the likelihood of solid grain drying demand
-The moisture levels in the soil are substantial and the chances of a solid yield seem good right now
-Growing conditions in most of Iowa, Illinois and Indiana are very good
-The southern half of Illinois and Indiana could use some more water; the northern half of Illinois and most of Iowa have all they need right now.
-The majority of the harvest may take place after September
Many of you have already bought a chunk of your annual propane supply. Most of those purchases allow you to lift the gas between September and March, so you know you’re covered this winter, come what may. Have you thought about what you will do if we have significant drying this fall? Will you just pull your already purchased contracts and then leave yourself threadbare for the winter? Will you leave yourself to the mercy of rack pricing?
The spread between September/October propane and 1st quarter gallons is not that great at this time, so if you feel like you need to add more length for the possibility of a good grain drying fall, perhaps you should consider buying some September gas and rolling unused gallons into October.