Much of southern Minnesota is abnormally dry, with the Twin Cities in a severe drought. The lack of rain is a big concern for farmers as is the ongoing Russian invasion of Ukraine which is creating volatility in agriculture markets.
Kent Thiesse is Farm Management Analyst and Senior Vice President at MinnStar Bank. He joined host Cathy Wurzer to talk more about what Minnesota farmers are experiencing.
The following transcript has been edited for length and clarity. Click the audio player above to listen to their conversation.
How is the weather affecting our farmers this summer?
It has really varied all across southern Minnesota, but really across the whole state. You know, last year started out very ideal. And then we got dry late in the year, especially western Minnesota and northern Minnesota. This year has been a little different. We started planting later than normal. And it got very late planting in parts of west central and central Minnesota up into northwest Minnesota. And some of those areas that were very dry last year, were actually too wet earlier this year.
Really the northern third of the state has had more than adequate moisture most of the year and in parts of central Minnesota down, but as you mentioned, if you go from the Twin Cities straight west to the South Dakota border and then you go south from there down to about the southern two tiers of counties in Minnesota, that band of Minnesota has missed a lot of the rainfall here in the last six weeks and tends to be very dry.
Now when you get way down near the Iowa border kind and up a couple counties in Minnesota, the moisture has been a little more frequent. You know, just to give you an example, I follow the weather data at two of the University of Minnesota experiment stations and research centers in southern Minnesota.
At the Waseca site, which is a little further east and a little further south. They’ve been fairly close to normal precipitation in the months of June and July, they’ve had about nine inches of rainfall and fairly frequently. So they really haven’t dried out that much. On the other side of the coin out at Lamberton in southwest Minnesota, which is further west and a little further north, they only got a little over an inch of rain total in the month of June. And they’ve only had an inch and a half of total rainfall in the month of July and most of that came in a three day period from the fourth to the sixth to July.
So conditions are certainly a lot different when we get into some of those areas that have just missed the rainfall. Now these rainfalls have also been spotty, you know, one location might catch an inch and a half of rain and a few miles away, they probably got less than a quarter inch. And that’s just the kind of summer it’s been here in the last six weeks as far as rainfall in much of at least the southern half of Minnesota.
I understand looking at the crop report that the crops are hanging in there. I mean, they don’t look bad at this point.
They really are. It’s amazing. I guess one benefit of the extra heat we talked about is it did allow our crops to really catch up, but even more, we planted later than normal. Again, looking at those research centers, they were running about 10 percent behind normal growing degree units at the first of June from starting May 1. And since June 1, we’re now running about eight to 10 percent ahead of normal.
So that means not only did we make up what we lost early from the cool wet weather, we actually went beyond that and that’s certainly helped. Especially where there’s no moisture stress, the crops are doing very well. I looked back this week on the crop report and we were looking at about 61 percent rated good to excellent for corn, this is nationwide and 59 percent for soybeans.
We’re slightly below last year, we were at 64 percent, good to excellent, a year ago. But if we look at Minnesota, we’re currently at 63 percent good to excellent in corn and 62 in soybeans. So we’re actually running three percent ahead of the national average. Last year we were running behind the national average as the drought had set in a lot more intense out in parts of west central and northwest Minnesota.
We need a couple more timely rainfalls probably in the next two to three weeks here to really determine our crop because there are some areas that are abnormally dry, to moderate to slight drought.
Certainly the weather forecast for next week has temperatures back in the 90s and that is going to put a lot of stress on the crops, both corn and soybeans. Right now we’re at kind of their maximum moisture usage. And in a lot of areas our stored soil moisture is fairly well depleted. So there’s not the reserves we had maybe even a year ago, and especially in southern Minnesota,
How is inflation affecting farmers?
Well, I think farmers have a lot of concern. We hear about inflation every day in the news, obviously, and that affects consumers and people on a day to day basis for farmers. They tend to lack in a lot of their inputs. Usually starting about now, the inputs for 2023, they probably started about now out until about February or March after the first of the year.
So the inflation impact for this year’s crop did not impact them as much as it will for next year’s crops. We’re looking at fertilizer costs right now to produce corn and they are about double what they were probably for the 2020, at least 2021 crop, but even probably at least 50 to 75 percent higher than it was for 2022 for most farmers.
In addition, costs for seed, for chemicals, for repairs, labor — just about every category you got of input costs for farming — have gone up. And it isn’t just the cost of things. Supply chain issues have also caught up work.
We saw that happen earlier in the year where we had a lot of severe storms back in May and early June, in parts of the state where farmers had damaged grain legs and grain bins. And in some cases, farmers have not been able to get the steel or the parts to repair those and repair machinery. So there’s been some of the big picture issues that are affecting all residents and all consumers also affect agriculture and are affecting agriculture.
So how has the Russia and Ukraine war overseas affected prices?
Well, it’s kind of interesting, you know, obviously early on, it was a positive. But you know, just a couple of weeks ago when it looked like they were going to have a temporary agreement with Russia to maybe allow some of the grain exports to be shipped out of Ukraine, suddenly, that was a negative on our markets in the US, and of course, then that didn’t come to reality because the Russians didn’t follow through. And all of a sudden the markets have rebounded.
So what we’ve really seen happen here, just in the last week, combination of the dry weather we’re talking about, not just in Minnesota, but many parts of the Midwest and the situation with Ukraine, we’ve seen the price of soybeans jump up over $1 a bushel just in the last week and we’ve seen the price of corn jump up 50 cents a bushel.
It has been negative because the crop looks like it’s gonna be a little better than they thought and then the Ukraine situation and just some other dynamics in the markets. But we’re not back to the highs that we had back in late May and to mid June. But we certainly have rebounded quite a bit here in the last week.
The markets still pay a lot of attention to what’s happening in Ukraine, especially with worlds grain supply and what that might look like months down the road after we get through the US harvest this fall.
I know you’re going to be at Farm Fest which is coming up next week. You’re the forum coordinator this year.
We encourage anyone to come out. We’re really excited because we have two full days of candidate forums and, of course, it’s been a big election year and the Minnesota Governor candidate forum is Aug. 3 at 10:30 am I believe this will be the first time that Gov. Walz and Dr. Scott Jensen have been together on the same format for a forum discussion.
And the first day at 9:30 am, we’re going to have the 1st Congressional District candidates together in a forum. And then we have the candidates from the 2nd, 6th, 7th and 8th Districts together at 10:30 am on Aug. 2 to talk about agriculture and rural issues.
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