Farm Credit Services of America vice presidents
| Apr 10, 2014
Some of the producers in our four-state area could begin planting their corn crop as early as next week. Others still are waiting for frost as deep as 5 to 6 feet to work its way out of the ground. Whatever the soil and weather conditions in their particular area, producers are itching to start on the 2014 planting season.
Before the tractors start rolling, we decided to poll (very informally) parts of our territory to assess planting conditions, crop plans and breakevens. The general consensus:
- Corn is still king among our producers. The USDA has forecast that farmers will plant fewer acres of corn this year – about 91.7 million acres compared to 95.4 million acres in 2013. But in many areas, particularly in Nebraska, farmers expect to plant corn on the same number of acres as last year.
- The average breakeven for corn is in the $4.50 range. But some producers are looking at breakevens as high $5 and as low as $4. A breakeven in the $11 range for soybeans is fairly typical, with $10 and $12 cited on either end for some producers.
- Dry ground conditions dominate, even in areas where no drought has been declared. The irrigation business is picking up in areas where center pivots were an unusual sight not so long ago.
For every generality, there are exceptions. Here’s a closer look at what producers are talking about in each of their areas of Iowa, Nebraska, South Dakota and Wyoming. These reports are provided by leaders of our marketplace teams.
Southwest: Soil temperatures are below normal for this time of year, and top soil is drier than a year ago. But farmers aren’t worried yet about planting delays; producers expect to plant in the next week or two. They also have started worrying about the lack of moisture though there’s still plenty of time for spring showers.
If spring conditions are right, farmers might make a last-minute decision to devote additional acres to corn. Breakevens for corn in the area generally are at $4.50, give or take 20 cents. But even if additional acres go to corn, southwest Iowa producers likely will plant more soybeans than last year.
Northwest: Some farmers, itching to get in the field, drove their tractor discs around their fields in early April. One time around and they decided to park the tractors. Rapidly changing (and warming) conditions allowed some farmers to start planting this week. There is lots of field work going on in the area.
Like the rest of western Iowa, conditions are dry -- enough so that they meet the Drought Monitor’s mild classification.
Producers in the area might plant more beans than last year, but they’ll stay heavily invested in corn, with typical breakevens falling between $4 and $4.50. Some, however, face steeper breakevens.
Whether they are talking moisture or breakevens, farmers express cautious optimism.
Northeast: Most of the snow has melted, but patches remained into the second week of April. Frost, in areas, reached 3, 4, even 6 feet deep this year compared to the usual 2 feet. All told, spring weather is about two weeks behind schedule. The best-case scenario would put producers in the field right after Easter, but most don’t expect to be planting until May 1, which still would put them in good shape. Any later than that first week of May and farmers will have to worry about corn maturity.
The ground is wet, and the area is in better shape than many in the region. Still, producers in recent years haven’t been able to depend on rains arriving when the crops need it. For the first time, some of our producers in the area have installed center pivots. Irrigation remains a financial experiment in the area, but interest is growing with the untimely dryness of recent summers.
Breakevens for corn producers – the majority in this area – are in the $4.50 range. But some are looking at breakevens as low as $4, while others need $5 because of higher rents and land costs.
Central: Planting schedules are on pace with past years. Producers expect to be in their fields by mid- to late April. Less normal is the soil condition, which is classified as dry to abnormally dry. About 70 percent of farmers in the area irrigate.
Crop intentions released by the USDA showed Nebraska producers cutting back on corn acres in favor of soybeans. That isn’t true of our customers in this area of the state. Traditionally, most have been more heavily invested in corn than soybeans, and that will remain true this year.
The breakeven for corn is generally in the $4.50 range – give or take 20 cents.
Northeast: Frost remained in the ground at least into the first week of April – later than usual. Nobody is expecting to plant until after Easter.
Breakevens cover the full range – from $4 all the way up to $5 for corn and $10 to $12 for soybeans.
Eastern: Winter didn’t deliver its usual levels of moisture, creating drier-than-normal conditions. One good rain could go a long way to ease concerns at the start of the growing season, which likely won’t get underway until after the middle of April. Irrigation has become more common in recent years, with about two-thirds of producers able to offset any shortage of rain. Ground temperatures remain cool.
Breakevens for corn generally are in the mid- to upper $4 range but producers with higher rents are looking at $5 for breakevens. Breakevens for soybeans are running $11 to $12, with the upper end again reflecting higher rents for some producers.
Eastern: The abundance of moisture that fell in the form of winter snow and rain is much appreciated following drought-like conditions, but the wet, combined with cold, has delayed planting. At this point in the year, famers normally would have their malt barley planted. So far, not even 10 percent of the 2014 crop is in the ground. Sugar beets sometimes are planted as early as mid-April but can be delayed into mid-May and still be okay. Producers aren’t worried -- just anxious to shake off a long winter by getting into their fields.
Most producers in this area grow contract crops. And most are anticipating a pretty good year.