AgriLife Economist: ‘High’ 2014 feed grains stocks are really a return to average levels
Writer: Robert Burns, 903-834-6191, email@example.com
COLLEGE STATION – Though this year’s predicted bumper feed grains yields are driving down prices farmers see, the long-term result could add stability to what has been a very volatile market, according to a Texas A&M AgriLife Extension Service economist.
“The higher stocks that we’re seeing build in the United States over the last several years — also around the world — are important factors in keeping up with increasing demand, across the grain complex,” said Dr. Mark Welch, AgriLife Extension grains marketing economist in College Station.
There has been a dramatic increase in prices over the last several years because of increased demand that has led to lower stocks, he said, which has stimulated growers to plant more acres. Recent droughts cut stocks even further, but this year, because of a dramatic increase in production due to record yields in U.S. corn and soybeans, there has been a “rebound” in stock levels.
One way economists look at grain stocks is as the number of days of use in storage at current consumption levels, Welch said.
For example, world corn stocks were estimated to be about 68.7 days in May, but by early October, they were projected to be about 71.5 days, Welch said. The difference, a little more than three days, resulted in prices dropping from about $4.81 per bushel to $3.41 a bushel.
Though current stock levels are higher than seen in past several years, consumption is also on the rise, he said.
“When ending stocks are considered relative to use, world stocks are closer to average,” Welch said. “The question is, will the steep drop in prices in the U.S. and worldwide provide enough incentive for growers to plant the acres and keep up with the escalating rate of consumption?”
Welch believes current prices may not provide that incentive, at least not in the U.S., as farmers look to alternative crops. He said farmers may look to lower-input crops, such as wheat and sorghum, if the prices do not justify the higher risk associated with a high-input, high water-use crop like corn when there’s concern about changing rainfall patterns.
“It is, ultimately, all about the weather,” he said.
More information on the current Texas drought and wildfire alerts can be found on the AgriLife Extension Agricultural Drought Task Force website at http://agrilife.tamu.edu/drought/ .
AgriLife Extension district reporters compiled the following summaries:
Central: Most counties reported soil moisture, rangeland and pastures as fair. Overall, crops were in good condition, as were livestock. The pecan harvest started, with good quality though small nut size. Producers were planting oats, ryegrass and wheat for winter pasture grazing. Livestock were in good to fair condition. Recent rains kept stock tanks and creeks full, providing adequate water for cattle. The cotton was completed. Forage producers were hoping for at least one more cutting of grass for hay.
Coastal Bend: Recent rain improved soil moisture and pastures in parts of the district. Producers were using ground spray rigs and airplanes to control volunteer green up cotton. After the rains, armyworms were a problem on Bermuda grass pastures. In some cases infestations justified spraying. Some producers were using herbicides to control brush. Cattle remained in fair to good condition with pastures greening up.
East: Cold fronts moved through the region bringing severe weather with lightning, thunder, high winds and rain. Henderson County reported from 2 to 4 inches of rain accompanying the storms. Soil moisture improved in many counties. With these rains and those throughout the summer months, along with cooler temperatures, producers found that pasture grasses had adequate levels of protein for cattle without supplementation. The haying season was ending, with supplies good. The dryland cotton harvest continued. Anderson County’s cotton harvest was about 50 percent completed, with light to moderate yields from early planted cotton. Producers were getting ready to plant winter wheat. Some producers were trying to get pastures cleaned up by shredding. In Wood County, producers were waiting on rain to begin winter pasture planting. In some areas, already planted cool-season forages began to emerge. Cattle were in good condition. Area cattle markets remained strong. With the price of heifers so high, many producers were having a hard time justifying keeping them. Cattle were calving, and fall cattle work was underway. Horn flies continued to be a problem in some areas.
Far West: Warm days and cool nights were the norm for the week. No rain was received, except in Culberson County, which got a scant trace. Topsoil and subsoil moisture ranged from adequate to very short. Pastures and rangeland were in fair to poor condition. Upland cotton was in fair to poor condition, with from 70 to 100 percent of bolls opening. El Paso County corn was about 70 percent harvested. Grain sorghum was in various stages of maturity. About 25 percent of winter wheat had emerged. El Paso County Pawnee pecans were being harvested, while Western variety pecans were at the shuck separation point. Alfalfa growers took their last cutting.
North: Topsoil moisture was mostly rated short to adequate, with a few counties reporting surplus. From 2 to 3 inches of rain fell throughout the region. High winds accompanied the rain, and there was some damage to trees and structures. Existing pastures were in good condition, and producers were finishing up planting winter pastures. They were also wrapping up the summer hay and cotton harvests. Overall, cattle were in good condition, and markets strong. Grasshoppers remained an issue in Kaufman County, and fall armyworms infested winter annual and Bermuda grass pastures in Collin county.
Panhandle: Temperatures were near average, with a trace to 2 inches of rain received throughout most of the region. Most counties rated soil moisture as adequate. In Collingsworth County, strong winds associated with the rains knocked some cotton out of the bolls, and peanuts that had been dug to dry will have to wait to be combined for a few days. In other areas, cotton was being defoliated, but no harvesting has begun. In Deaf Smith County, producers harvesting corn silage, and though choppers able to get in the field, many trucks had to be towed out because of wet field conditions. The harvesting of corn for grain started but was not yet going full blast. Wheat growers continued planting, with much of the early planted wheat emerged. There were also some insect and seedling disease pressure noted in several early planted area fields. In Hansford County, some longer-season corn yielded 260 to 265 bushels per acre. Most soybeans were cut, with some fields yielding 78 bushels per acre, but the average was closer to 65 bushels. Gray County had high winds, hail, heavy rain and a possible tornado that damaged corn, cotton, and sorghum. Wheeler County dryland cotton was maturing and opening bolls quickly as fields became moisture stressed. Dallam and Hartley counties reported some hail damage but nothing significant. Rangeland and pastures were mostly in fair to good condition. Cattle were in good condition, with livestock producers weaning spring calves.
Rolling Plains: Rain fell in parts of the region that had not seen rainfall in several weeks. Some areas received as much as 2 inches. Pastures that had been in great need of moisture and were expect to start improving soon. In other areas, producers were dry-planting wheat. Other producers were spraying for armyworms in earlier-planted wheat. Cotton growers were defoliating and planned to start harvesting soon. Rangeland and pastures were in fair to good condition. The pecan harvest began. Livestock were in fair to good condition. Runoff water was desperately needed to replenish stock tanks and lakes.
South: Temperatures remained cooler during the evenings and nights, rising to the mid- to lower 90s during the days. Rangeland and pastures greened up throughout the region, helping some livestock producers cut down on supplemental feeding. In the northern part of the region, peanut digging and harvesting began, while wheat and oat producers continued planting. Rangeland and pastures improved for the most part, but some areas still needed more rain. Forage production has been fairly good, but may have not been enough to carry beef cattle through the winter months in some areas. Soil moisture throughout the area remained mostly adequate. In the eastern part of the region, morning moisture helped rangeland and pastures, but more was needed. Ranchers continued supplement cattle with protein and hay. In Jim Wells County, the cotton and sesame seed harvests continued. Livestock markets were holding strong, but offerings were low. Soil moisture throughout the area was mostly adequate. In the western part of the region, soil moisture was short to very short. Stock-tank water levels improved. In Zavala County, producers suspended supplemental feeding due to adequate forages on native range and pastures. Oat and wheat producers finished planting. Vegetable growers were planting spinach and cabbage. Pecan producers began harvesting early maturing varieties. In the southern part of the region, some fields remained saturated. Fall corn was progressing well, and onion crops were in good condition. In the Hidalgo County area, growers were planting fall vegetables, and sugarcane was doing well due to the recent rains. Soil moisture remained 100 percent adequate in Cameron and Hidalgo counties, and 45 to 65 percent adequate in Willacy County.
South Plains: The weather was mostly warm and mild until the end of the week, which brought much cooler temperatures and scattered showers in some counties. Lows were dipping into the 40s and upper 30s, with daytime highs in 70s and 80s. Floyd and Mitchell counties reported from 0.2 inch to 1.5 inches of rain. Cotton needed more heat units to finish boll-fill. The Cochran County peanut harvest began, and producers were applying harvest aids to cotton. Corn harvest was expected to begin there next week, and pasture and rangeland remained in good condition. The corn harvest already began in Floyd County, with above-average yields reported. Cotton there needed about two to three more weeks of warm, dry weather. Early grain sorghum was harvested, with the late-planted crop expected to be ready in a couple of weeks. The pumpkin harvest was completed. In Garza County, while some cotton fields benefitted from the recent rains, others were damaged by the wet conditions, with some plants molding and, on occasion, showing sprouting in bolls still on the plant. In Hockley County, most corn was harvested, and the grain sorghum harvest was in full swing. The Lubbock County cotton harvest was expected to begin soon, and the grain harvest there was ramping up. Producers in Lynn County are beginning to apply harvest aids to cotton. Mitchell County received hail along with the rains, which destroyed a lot of cotton. The cotton harvest was still a few weeks away. Swisher County had warmer, ideal conditions for cotton development until a couple of cold fronts moved in. Although some farmers there applied harvest aids, most cotton was not ready as boll development in the upper third of the plant was virtually nonexistent.
Southeast: Soil moisture throughout the region was mostly in the adequate to surplus range, with Brazos and Chambers counties reporting 100 percent adequate, and Lee County reporting 100 percent short. Rangeland and pasture ratings varied widely too, mostly from excellent to good, with good ratings being the most common. The recent rains delayed the cotton harvest. Regrowth in cotton plants will likely reduce quality and require additional defoliation. Livestock were in good condition. The recent rains came at the right time for hay and forage producers who were applying fertilizer. In Chambers County, the rice harvest was ongoing, with the first crop about 95 percent done. In Montgomery County, producers were planting winter annuals. In Brazos County, armyworms continue to cause problems in some fields.
West Central: Days were hot with mild nights, but generally warmer than normal. Dry conditions continued until late in the week, then a cold front brought much- needed rainfall to many areas. Soil moisture remained very marginal. Fieldwork continued, including planting of small grains and wheat. Some producers were dry- sowing wheat. The grain sorghum harvest was mostly completed, with a few late-planted sorghum fields remaining. Early planted winter wheat was in good condition. Producers were applying pesticides where necessary to control armyworms. Cotton was quickly maturing and opening bolls. Overall, cotton was in fair condition, with irrigated fields fair to good. Dryland cotton fields were fair to poor. Some cotton was being defoliated, with harvesting expected to begin in the next few weeks. Most acres are two to three weeks away from harvest. Rangeland and pastures continued to improve with good fall growth due to September moisture and warm temperatures. Livestock remained in fair to good condition. Fall livestock work was underway. The pecan harvest was just beginning. Deer were in good condition, and the acorn crop was plentiful. Some archery hunting started.