Wet weather delays planting, forces farmers to make difficult decisions

Unusually high levels of rainfall during the past several weeks have added another ordeal to a growing list that Missouri farmers must face.

Additional moisture in the soil has prevented planting, or at least made it difficult for farmers to begin planting, causing a delay that could reduce yield as well as revenue from corn, soybeans and other staples.

“We have had to replant some,” said Jeff Jones, a fourth-generation farmer in Callaway County. “We had some big rains after we planted, and we have about an 80% stand on some, and some as low as probably a 40% stand that we have had to go in and replant.”

The higher the stand, which is a proxy for yield, the more advantageous it is for farmers. The maximum possible stand is 100%.

Jones’ situation is like that of others with agricultural operations throughout the Midwest. Fields that should already have been planted continue to be vacant.

According to a U.S. Department of Agriculture report, farmers had planted about 69% of their corn for the growing season as of the week ending June 2. At the same time last year, all the corn that was supposed to be planted was in the ground.

The report indicates the same condition for another of Missouri’s cash crops — soybeans. As of June 2, about 18% of the total soybeans for the season had been planted, a steep drop from 84% planted at the same time in 2018.

A tractor sits empty at Jones Angus Farms. Jeff Jones said rains have forced the farm to re-plant some of its cash crops. | Zhihan Huang

“Because of the wet weather, we have planting delayed,” said Kelly Smith, director of marketing and commodities with the Missouri Farm Bureau. “Now that we have flooding, there is some of this ground that will just not get planted this year in 2019. That is a huge and significant factor for a lot of farmers in this state.”

Many are in a difficult position when deciding whether to plant or wait.

“Soil moisture conditions have to be in a fairly defined window for the opportunity for planting to occur,” said Rusty Lee, agronomy field specialist with University of Missouri Extension. “This year we would get rain and then we would have two or three days of no rain, and just before the conditions were correct for planting, it would rain again. That resets the clock.”

Jones first noticed the negative weather conditions when he was planting wheat and barley in the fall.

“The wheat was injured because of the wet weather,” Jones said. “I have been out and counted the seeds and measured the heads, it looks like our wheat is not as good of a quality and not as good of a yield because of the wet weather.”

This moisture in the ground complicates the calculus for farmers because suboptimal conditions reduce yields.

Ideally, corn and soybeans are planted in April or May. The later in the year those crops are planted, the more likely it is that farmers will harvest fewer crops than what they planted.

Jones feeds cattle on his farm. Jones said he noticed while planting wheat in the fall that wet conditions could be a problem. | Zhihan Huang

Smith estimated that farmers will lose one bushel per acre for each day they delay past the optimal month. Lee projected that 1% of yield would be lost for each day crops are planted after June 1.

In other words, small delays in planting will create significant reductions in revenue.

Suppose that a farmer plants corn on a 100-acre plot within the ideal planting window with an ideal yield of 150 bushels. Assuming the price of corn is about $4 per bushel, which is roughly the current spot price, that would mean $60,000 of revenue.

If that same farmer plants corn just one day outside that window and loses 1% of the corn, the revenue is reduced to $59,400. If another day — and another 1% of expected yield — is lost, the revenue is cut to $58,800.

Those production losses are compounded by the direct costs that farmers incur when they must replant the crops due to bad conditions. The costs of seed and operating the tractor and combine all increase overhead expenses.

Complicating all this are other factors that have made it difficult for people in the industry to keep operating.

For one, retaliatory tariffs in countries that import crops from the U.S. have reduced demand. The trade war comes at a time when commodity prices are lower than they were in the past. In 2012, for example, the price of corn was $8 per bushel. Now it is slightly more than $4.

Further, a regional drought during the 2018 planting season reduced the amount that farmers could sell in the market where prices were already low.

“There is a lot of farm stress that is going on,” University of Missouri Extension Professor Raymond Massey said. “They are saying, ‘Hey, I have got my corn, I have got my fertilizer, I have got my tractor and I am all ready, but the rain will not let me plant.’”

Before this spring’s wet weather, Missouri farmers were grappling with the effects of localized drought during the 2018 growing season. | Zhihan Huang

That can be consequential because farmers have obligations they must remunerate.

“Those people who have had the equity in their businesses eaten down over the last few years may have some issues when they go to the bank to farm again next year,” Smith said.

Rarely do they pay for their equipment, along with supplies and equipment for the season, with savings. Many have incurred debt to keep operating their businesses.

Massey estimates that, to earn a living, farmers need at least 1,000 acres and that it will cost $300 per acre in equipment and supplies to plant and harvest crops for a growing season. Banks may agree to finance 50 to 60% of the overall cost, leaving farmers with the remaining cost.

With years of reduced commodity prices, farmers may not have the savings needed to absorb that expense.

According to a May report from the Federal Reserve Bank of Kansas City, “Farm income decreased across the Tenth District and the trend of steady deterioration in agricultural credit conditions continued in the first quarter of 2019.”

The silver lining in all this is that commodity prices have rebounded in anticipation of the shortage in the U.S. resulting from extreme weather. Based on figures from MarketsInsider, the spot price for a bushel of corn as of June 12 was $4.30. About one month earlier, it was almost $1 less.

It is welcome news — provided farmers are able to plant crops in their fields. Some may not be able to plant because the conditions may not allow for it. Those unable to plant will rely on some combination of crop insurance as well as federal disaster aid.

However, some of those in serious trouble may simply shutter their operations.

Jones and his family understood that risk — so they diversified. They raise cattle along with planting soybeans, wheat and barley. They have no plans to discontinue anytime soon. Instead, they will operate their equipment for longer periods and reduce expenses as much as they can.

“I am a fourth-generation farmer, and I get to live my dream every day,” Jones said. “I am independent. By the grace of God, we are here to help others.”

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