Focus on Ag: Drought concerns intensify

Kent Thiesse
Farm Management Analyst and Vice President, MinnStar Bank
Kent Thiesse

Some areas of the Upper Midwest and Northern Plains States received much needed rainfall this past weekend, ranging from a few tenths of an inch to over two inches in some locations.

The rainfall provided some much needed temporary relief to crop deterioration in areas hard-hit by drought conditions, while helping maintain crop potential in areas with more favorable conditions. Even though recent rainfalls are providing  short-term relief for some extremely dry areas, the overall drought situation has continued to intensify in many portions of the region.

According to the latest “U.S. Drought Monitor”, over 75% of Minnesota is now categorized to be in either the extreme drought or severe drought category, with only the southeast quarter of the state being largely spared from these conditions.

Nearly all of North Dakota and South Dakota are at some level of drought, with over two-thirds of North Dakota and a large area of north central South Dakota in either extreme drought  or exceptional drought.

Nearly the entire western third of the United States is in either severe, extreme or exceptional drought, with a majority of the region in the two top-level drought categories. Areas that are in the extreme or exceptional drought areas are likely seeing significant crop loss and extremely limited forage production, as well as longer term effects on lakes, rivers, streams and ground water supplies.

Sometimes the Drought Monitor is misunderstood. It is meant to measure the overall long-term impacts of extended drought conditions, as compared to representing current crop conditions. This is why some areas that are listed in “moderate” or “severe” drought may still have fairly good crop potential with below average rainfall, provided that these areas have received some timely rainfall.

Some portions of the Upper Midwest also benefitted from starting the 2021 growing season with above average levels of stored soil moisture, which has also helped maintain crop development through some very dry periods during the summer months. However, it should be noted that the stored soil moisture levels have been rapidly depleted in many locations, with some areas now near zero available stored moisture.

The weekly USDA crop report released on August 2 listed the condition rating of the corn in the U.S. at 64% “good-to-excellent”, which has been fairly steady in recent weeks. However, there is a wide variation in the “good-to-excellent” crop ratings across the major corn and soybean producing states.

Some of the higher crop ratings included “good-to-excellent” ratings of 80% in Ohio, 76%, in Indiana, 75% in Wisconsin and 71% in Nebraska. This compares to the much lower “good-to-excellent” corn ratings of 18% in North Dakota, 32% in South Dakota and 36% in Minnesota. The higher ratings in the two largest corn producing states in the U.S. were Illinois at 68% and Iowa at 62%, which is very close to the national average.   

The latest USDA crop report listed 60% of the U.S. soybean crop as “good-to-excellent,” which has also stayed fairly steady in recent reports. Nebraska, Wisconsin, Indiana and Ohio, as well as some southern states all had soybean ratings of 70 to 80% “good-to-excellent”.

The recent report listed Iowa at 61% and Illinois at 67% in the higher soybean rating categories. By contrast, the “good-to-excellent” soybean ratings were 17% in North Dakota, 30% in South Dakota and 34% in Minnesota.

There is not a lot of historical correlation between weekly crop ratings in early August and final corn and soybean yields. Timely August rainfalls can enhance final yield levels in areas that are not in extreme drought conditions; however, lack of late season rain events can reduce final crop yields in very dry areas. The latter situation occurred in portions of southwest Minnesota, northwest Iowa and southeast South Dakota in 2020 when very favorable conditions early in the growing season were followed by very dry conditions in late July and most of August.

Some private companies will have Midwest crop tours later in August which may provide some indicators regarding 2021 corn and soybean yield trends in the region. However, many of those crop tours concentrate on the core areas of the Corn Belt in Illinois, Iowa, eastern Nebraska, southern Minnesota and southeast South Dakota, but do not reach into the most drought-stricken areas of North Dakota and South Dakota or Western Minnesota.

In a year such as 2021, that may raise some questions regarding the resulting overall U.S. corn and soybean yield projections for the year. Based on the June 30 USDA crop acreage report, North Dakota had the fourth highest number of soybean acres in the U.S. in 2021, and North Dakota and South Dakota combined trailed only Iowa and Illinois for total corn acreage.

Given the wide variation in corn and soybean conditions across the Midwest and Northern Plains States, we will likely not have good U.S. yield estimates for 2021 until well into harvest season.

Emergency having and grazing of CRP acres

In recent weeks, drought conditions have intensified in most of the western third of the U.S., including the Northern Plains and Northwest Corn Belt states, while modifying a bit in the Central Plains and some Midwest states. Livestock producers in those areas are being especially hard-hit by the extended drought conditions with exhausted pastures and depleted feed supplies. Many beef cattle producers are being forced to reduce their herd sizes due to limited pasture and hay resources.

In recent weeks, USDA has been announcing the potential for emergency haying and grazing on land enrolled in the Conservation Reserve Program (CRP) in the areas of severe drought  or higher. Livestock producers in all counties in North Dakota, South Dakota and Montana are now eligible, along with a large majority of counties in Minnesota, Nebraska and Iowa.

Producers must notify their local Farm Service Agency (FSA) office before initiating any haying or grazing on CRP acres. Any hay that is cut and baled must be completed by September 30, and all bales must be removed within 15 days after the hay was baled.

CRP emergency grazing can last no longer than 90 days and must be completed by September 30. For counties not in a designated emergency area, up to 25% of the eligible CRP acreage may be eligible for haying and grazing; however, this would result in a 25% reduction in the annual CRP rental payment.

Livestock producers should check with their local FSA office regarding eligibility, enrollment details and requirements for emergency haying and grazing of CRP acres. A list of eligible counties for emergency haying and grazing and other details are available at the following FSA website: https://www.fsa.usda.gov/programs-and-services/conservation-programs/conservation-reserve-program/emergency-haying-and-grazing/index

The USDA “Livestock Forage Disaster Program” (LFP) is also available to assist livestock producers in drought-stricken counties. The LFP program allows haying and grazing on lands that are enrolled in federal programs, but does have certain restrictions on grazing of various types of grasses.

There may also be some assistance available to certain livestock producers through the USDA “Emergency Livestock Assistance Program” (ELAP). Eligibility requirements and details on all USDA drought assistance programs are available at local FSA offices.

Details and updates on the USDA drought programs can also be found at: https://www.fsa.usda.gov/programs-and-services/disaster-assistance-program/index

Many state departments of agriculture and land grant universities in the states impacted by the drought also have some very good information and resources available.

For additional information contact Kent Thiesse, farm management analyst and senior vice president, MinnStar Bank, Lake Crystal, Minn., at (507) 381-7960 or kent.thiesse@minnstarbank.com, or visit www.minnstarbank.com.