One noticeable element in the latest world agricultural supply-and-demand estimates (WASDE) released by the U.S. Department of Agriculture (USDA) on Dec. 10 was the amount of crops left in the field, especially corn.
Much of the report was a rehash of the previous November estimates, as is most often the case. The December WASDE is usually viewed as a report that doesn’t cause a lot of commotion in commodities markets, and that’s what largely happened this week.
However, the amount of unharvested corn stood out. About eight per cent remains in the field, according to USDA’s latest crop report, its final update for 2019.
And farmers were further behind across the U.S. Northern Plains. Inundated with snow and frigid temperatures, farmers have been unable to finish off their corn and soybean fields — especially in North Dakota, where farmers will have to overwinter nearly 60 per cent of their corn.
That’s something corn and soybean growers across Canada and canola growers on the Prairies can certainly understand. Farmers in southern Ontario faced the same difficult conditions as their counterparts a little to the south. On the Prairies, canola faced a challenging harvest as well, with upward of 10 per cent of the crop still in the field.
Exacerbating the situation across the northern Plains has been insufficient propane supplies throughout the region. Farmers need propane to dry their corn and soybeans before putting them in the bins. Colder temperatures increased household and commercial demand, with the delivery infrastructure woefully unable to keep up.
On top of that are concerns about the crops’ quality. Wet conditions further delayed a late harvest and quality levels very likely declined.
As the new year approaches with levels of optimism set to grow, the January WASDE should be a strong indicator of those hopes being justified or dashed.
Adding to farmers’ hopes are better prices — something that should come their way with the U.S. and China agreeing in principle to a Phase 1 trade deal. Prices for soybeans, corn and other commodities should increase, at least in the short term.
Until U.S. President Donald Trump and Chinese President Xi Jinping put pen to paper, however, that deal isn’t cast in stone. Added to that, there’s a long way to go when it comes to Phase 2 and eventually a comprehensive agreement.