Moisture is the wild card, cautious optimism

Farm Forum

MINOT, N.D. — Like a lot of farmers on the Northern Plains, Jon Wert has benefitted from strong crop prices and average or better yields during the past few years. Times have been good, and Wert and other farmers have been optimistic.

But this January, with spring planting three months or less away, Wert is a little less optimistic than he had been.

“Moisture is a concern,” says the New England, N.D., producer. “Expenses keep going up. And (crop) prices aren’t as good as they have been. But I’m still cautiously optimistic.”

Wert is among the 40,000 people and 360 exhibitors expected to attending the 42nd annual KMOT Ag Expo in Minot, N.D. The three-day farm show, which ended Jan. 25, is billed as “the largest indoor agricultural show in the Northern Midwest.”

Wert’s outlook for 2013 is shared by many farmers and agribusiness people at the show. Though ag producers often describe themselves as cautiously optimistic about an upcoming growing season, their use of the term is particularly common this winter.

On balance, “Farmers have made a lot of money the past few years,” says Jeff Volk, agronomy manager at Renville Elevator Co., which has locations in Powers Lake, Tolley and Benedict, all in North Dakota. “The opportunities don’t look as good this year. There isn’t as much optimism. But it can still be a good year, if we get rain at the right times.”

Despite concerns about moisture and expenses, “There’s still a lot of optimism out there. There’s still a lot of hope out there,” says Paul Overby, a Wolford, N.D., farmer who also operates Verdi-Plus, a company that helps ag producers manage their farm operations more efficiently.

Moisture is the wild card. Some parts of the Upper Midwest need more moisture — a lot more. Other areas are doing just fine.

“We’re in really good shape,” says Carlan Pieterick, who works in equipment sales for Farmers Union Oil Co. in Rugby, Towner, Wolford and Leeds, all in North Dakota. “We’ll need some rain during the growing season, but we’ve got plenty of moisture to get the crops off to a good start this spring. “

His company’s trade area enjoyed exceptionally strong yields in 2012, Pieterick says. “The canola wasn’t so good. (Temperatures rose too high at a key time in the crop’s development.) But everything else was good.”

The combination of strong yields and high crop prices has boosted profits for farmers in his area, Pieterick says.

He smiles when asked if those profits have boosted equipment sales.

“Things haven’t been boring,” he says.

But most areas aren’t as fortunate as the area served by Pieterick’s company, farmers and others at the Minot show say.

“We’re really dry,” says Jim McCullough, a veteran Regan, N.D., farmer. “We’re going to need rain in the spring and we’re going to need timely rains during the summer.”

Crops, prices

Minot is the largest city in northwest North Dakota, an area where wheat and other small grains traditionally have dominated crop production. But farmers and others at the Minot show say corn and soybeans almost certainly will gain acres at the expense of wheat, both in northwest North Dakota and elsewhere in the Upper Midwest.

“I’ve heard our (seed) corn sales are up by a third this year,” says Pieterick.

New and improved corn varieties allow farmers to grow the crop in areas where it once wasn’t feasible, and attractive corn prices encourage producers to grow it.

Soybeans also are drawing plenty of attention because of attractive prices, McCullough says.

Canola is another crop that deserves attention from many producers, Wert says.

North Dakota is the nation’s leading producer of the crop, which fits nicely in a rotation with wheat, Wert says.

Overby and others note that crop prices have slumped this winter. New-crop prices, or the price for crops produced in the 2013 growing season, generally are considerably lower than old-crop prices, or the price of stored, unsold grain.

Expenses such as land costs typically are slow to fall when crop prices decline, Wert says.

Subsoil moisture

The biggest concern of farmers and others at the Minot show may be subsoil moisture.

Most area crops were able to overcome hot, dry conditions in 2012 because of abundant subsoil moisture. But almost all of that stored moisture is gone, so 2013 crops will need timely rains, or moisture that falls in key times in a crop’s development. An inch of moisture at the right time can do more than good than 2 inches a week too early or a week too late.

“We had some good crops last year,” McCullough says. “The subsoil moisture carried us through. But we won’t have it this year. We’re really going to have to rely on timely rains this year.”