The 2009 U.S. crop harvest has been slow, adding clouds to a dairy feed price picture that looked to be brightening just a month ago. Dairy Profit Weekly editor, Dave Natzke, reported Friday that we’re at a point when the nation’s soybean harvest should be winding down and the corn harvest should be more than half finished however, a cool growing season, followed up by a wet fall in many areas, has put farmers well behind normal in their harvest schedules.
Based on USDA’s Crop Progress report, less than half of U.S. soybean acreage and only about one-fifth the corn acreage has been harvested, according to Natzke, both running about 40 percentage points behind normal. The wet conditions are also raising concerns regarding mold growth in the field and, in the case of silage, frosted forages could hurt storage fermentation, negatively affecting feed quality, he warned.
Another factor in determining feed prices is demand. University of Illinois ag economist, Darrel Good, says China has been aggressive in buying soybeans but has backed off somewhat on corn purchases. However, demand for corn by the U.S. ethanol industry has been robust, he said.
“So, with eyes on the weather, harvest prospects and demand, corn and soybean futures prices have been on a roller coaster in October,” Natzke said. Despite being down from monthly peaks, December corn futures prices are about 50 cents per bushel higher than a month ago; with soybean meal futures prices up about $10 per ton. On a positive note, Natzke pointed out that, since April, U.S. average alfalfa hay prices have been running $30-$50 ton lower than the same month a year earlier, providing some feed price relief for farmers.
The old joke is that if you don’t like the weather, wait a while and it will change, Natzke concluded. USDA’s Crop Production report will be released November 10 and that should give us a clearer view of the 2010 feed price picture. And, of more immediate interest, USDA will announce final monthly U.S. average feed prices on Friday afternoon, which will be used to determine September’s Milk Income Loss Contract program payment.