Following are some observations by Kent Thiesse, Farm Management Analyst and Vice President at Minnstar Bank in Lake Crystal.
Crop Production - 2011 will be remembered as a crop year with weather extremes and highly variable crop conditions in many areas of Minnesota. The year started out with later than normal corn planting in most of the State, with little or no corn planted in April in many areas. Cooler than normal temperatures, and above normal rainfall, existed during the early portions of the growing season. The last half of the growing season saw above normal temperatures, and way below normal precipitation levels in most areas. The very warm, dry weather pattern lead to rapid development, maturity, and dry-down of the 2011 corn and soybean crop. Many areas of Southern and Western Minnesota were impacted by the early killing frost that occurred on September 15.
In most areas of southern Minnesota, the 2011 harvest was highly variable, mainly due to the erratic weather conditions during the growing season. Whole field corn yields generally ranged from 140-180 bushels per acre, while whole-field soybean yields were mostly in a range from 35-50 bushels per acre, with large variations occurring, sometimes on the same farm, or in the same township. The good news is that drying costs were minimal and crop quality was very high.
What can we expect next year - Most of southwest and south central Minnesota are now listed as being in a "Severe Drought", with nearly the entire State categorized as "Abnormally Dry." The University of Minnesota Research Center at Waseca only received 2.52 inches of rainfall in the four-month period from August to November, 2011, compared to a normal precipitation amount of 12.59 inches during that period, which is among the driest in history. Many areas of the region received less than two inches of rainfall from late July until the end of November, and some locations received less than an inch of precipitation in that period. The very dry soil conditions during and after harvest season lead to difficulties for primary fall tillage, and resulted in some growers suspending fall nitrogen applications, due to concern over nitrogen loss. The lack of rainfall in the late summer and fall months has resulted in less than three inches of stored soil moisture in the top five feet of soil, which is the lowest in several years, and is about 25-35 percent of maximum capacity. This will be a concern as we head into the 2012 growing season.
Grain Prices - Local cash bid prices for corn in Southern Minnesota were near or above $6.00 per bushel at many locations throughout much of 2011, until the past couple of months, reaching $7.00 per bushel on several occasions during the summer months. However, local corn prices have now declined to near $5.60 per bushel, as of December 16. Cash soybean prices stayed near or above $13.00 per bushel until mid-September, and have declined ever since down to the current level of about $10.85 per bushel. By comparison, at this same time in recent years, local cash corn prices were near $5.50 per bushel in 2010, $3.50 per bushel in 2009 and 2008, and around $4.00 per bushel in 2007. Local cash soybean prices were about $12.70 per bushel in mid-December of 2010, $9.80 per bushel in 2009, $8.25 per bushel in 2008, and $10.85 per bushel in 2007.
Crop Input Costs - Crop input costs in 2011 increased moderately, compared to 2010, with fairly significant increases in expenses for seed, fertilizer, and fuel. For the second year in a row, many producers had very limited corn drying costs, due to the early maturity of the corn and the much warmer weather pattern this past fall. Land rental rates increased significantly in many areas in 2011, and are likely to have another significant increase for the 2012 growing season. Agriculture interest rates, both for operating loans and longer term loans, remain quite low, which is a trend that is likely to continue in 2012.