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Wednesday, May 4, 2016

Weather changes affect markets

Friday, February 11, 2005

Elwyn Taylor, Iowa State Climatologist described weather factors affecting growing conditions, an indicator of future yields at the ag show show at the Cherokee campus of Western Iowa Tech Community College on Tuesday.

During his talk, which included many amusing anecdotes,

Taylor observed that South America had a normal precipitation season for crops and Australia had quite a bit of rain, causing the wind patterns to carry big weather storms farther north.

Taylor noted there have been climate changes in the last 20 plus years. Rivers in Iowa are fuller, twice the amount as 50 years ago. Statistics show that from 1933 through 1966, there were 11 major hurricanes, more moisture and precipitation. From 1966 through 2003, there was only one major such hurricane.

"I believe the weather cycle is beginning now to go through a period of more precipitation. There is always a period of years of drought followed by a period of moisture and then back to drought and so forth. Foggy days in the spring, as many of you already know, comes from the Gulf of Mexico. With many foggy days in the spring, it usually means a wetter growing season," said Taylor.

Taylor reported, "Serious Corn Belt drought has followed an apparent 19-year cycle for 200 years. The cycle suggests a risk of drought is greater during the six years (2005-2010) than it was during the past 12, and history shows that the years of reduced yields seem to appear suddenly just when new record high yields are being realized. There are some indicators of increased crop production risk but there is no reason to assume that 2005 will be the "first wide-spread drought of the century."

With Asian rust making an appearance in this country, destroying soybean fields, Taylor is very aware of the concern it brings to farmers. According to Taylor, rust follows a low jet stream bringing in moisture, usually at night after a warm clear day from the south. Taylor noted that Nebraska, Kansas and Western Iowa are suspected areas for this to occur.

The 2004 growing season was a cool one with enough moisture. Taylor commented last year's growing season yielded an abundant corn crop with growth but not maturity. For that reason, wet corn produced a problem and expense for farmers to deal with.

"For this and other reasons, I expect the next 22 years to have a harsh weather pattern which will produce some management risk. I think raising corn in Nebraska and central South Dakota will be much harder. The area for growing corn will narrow, contract, due to weather," said Taylor.

He went on to say California and Texas has more rain than ever before this time of year. It is extra dry in the southeastern portion of the U.S. and if this continues into May, look out for a drought. He would then expect the drought to expand into the Ohio valley and into Indiana. Also, Arkansas is quite dry and if that continues into March, look for the drought to move northward.

Cycles are never perfect with a ten percent risk factor. The 12 month cycle is perfect but don't count on Jan. 21 being the oldest day of the year as it could be Dec. 24 or Feb. 15. Just as we experience these very warm days in Feb. Over 200 plus years, we see a 18.6 year cycle but it could be off two years in either direction. 2005 could be a lot like 1987.

Farmers need to take weather cycles into consideration and use management tools to reduce the volatility of the market. Insurance, government programs and control chemicals affect the bottom line. Cycles should make farmers aware of the risk.

"Weather conditions are seldom such that highly reliable forecasts are feasible. Leading weather indicators, however, have proven useful in the anticipation of above or below trend crop yields during the past decade. Indicator models are usually reliable to plus or minus of five percent of actual yields," said Taylor.

Weather factors taken in account should influence farmers' decisions on managing risks in the market place.

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