Short Crop, Long Tail?
This article was originally published on August 20, 2012 and expired on September 15, 2012. It is provided here for archival purposes and may contain dated information.
Short Crop, Long Tail?
"Short crop, long tail" is one of those catchy phrases that stick in your brain. I remember hearing it early in my Extension career after another drought year from one of our Crop Outlook and Marketing Specialists. Stories of the "drought of aught 12" will likely be told for years and "short crops have long tales" may also be accurate. Even as rains return the impacts of this drought will be felt well into next year and maybe longer.
As an agronomist I try to avoid economics, when possible, and I will defer to Darrel Good our respected Extension Emeritus Marketing guru to explain the market impacts of the long tail scenario: "The logic of this expected price pattern is based on three tenets. First, prices need to move sharply higher in a relatively short time frame so that consumption becomes unprofitable to some end users and the overall pace of consumption is reduced to be in line with expected supplies. Second, a short crop is expected to be followed by much larger production in the following year as weather conditions return to normal and producers respond to the incentives of high prices. Third, once prices peak and start to move lower, an extended period of declining prices is required in order to re-build the pace of consumption to the level of subsequent production."
Agronomically, we expect impacts of the drought to linger as well. Obviously, soil moisture levels are very low and without significant rain this fall and winter next year's crop could be sensitive to any moisture issues either short or longer term. Better soil moisture levels will be needed to breakdown some of this year's herbicides to safe level before we can safely rotate crops next year. Our weed science group is getting ready to put out plots to test the crop rotation limitations for many products. Farmers can check the labels on their products for indications about rotation limitations under dry conditions.
Additionally, abnormally low corn yields will mean that nutrient usage will also be low. Phosphorus and potassium not removed in grain will stay in the field. Nitrogen fertilizer will likely be left in the soil until it is lost via the natural processes and a little may survive until next year. Many farmers will try cover crops for the first time this fall in order to temporarily retain some of the leftover nitrogen. Then, when the cover crop is killed in the spring this nitrogen will be re-released back into the soil. Farmers that removed drought damaged corn for silage will need to remember that P and K removal is much higher when the whole plant is removed from the field.
Ending on a bit of good news, for the first time this summer, the National Weather Service's Drought Outlook for Illinois shows a likely improving of conditions for much of Illinois.
Source: N. Dennis Bowman, Extension Educator, Commercial Agriculture, email@example.com
Pull date: September 15, 2012