A contact in Texas told me that dairies pay high prices for corn silage and also offer a discount of about 20 cents for “empty” stalks to buy for feed that they probably won’t get. their normal maize ration either because of a lack of supply or higher costs.
Sharply declining crop yields and parched pastures are reducing local feed supplies and contributing to a sharp rise in feed costs, according to the Daily Dairy Report. For the week ending Aug. 21, the USDA rated 49% of pastures and rangelands nationwide as poor or very poor, including 84% as poor to very poor in Texas. Drought-stressed pastures mean that feeders will have to buy feed and that will likely be expensive.
Corn conditions in Colorado, Kansas, Kentucky, Nebraska, Texas, Tennessee, South Dakota and North Carolina were all below the 50% or more good to excellent rating as of 21 august. Apart from poor corn stands, some of these states may also have an aflatoxin problem due to hot and dry weather. The ideal conditions for aflatoxin occur on hot August nights during a drought. Dairy cattle and young pigs are susceptible to disease from corn infected at 20 parts per billion or more. Ethanol plants must test for the toxin to ensure that the DDGs are not infected.
Along with feeders that need corn, so will ethanol plants and some of these plants are in areas of states that are expected to have lower than normal corn yields. Base levels at a plant in Blair, Nebraska, as of August 26 were $1 on the December futures contract for August and 75 cents on the December futures contract for the first half of September. An ethanol plant in Council Bluffs, Iowa, was at 80 cents on the September futures contract for August and 50 cents on the September futures contract for the first half of September, and a plant in Fort Dodge, Iowa, was at $1 on December futures contract for August. Feed operations at Hereford Teas offered $1 on the September futures contract at $1.10, as of August 26.
States like Illinois, Indiana, Minnesota, parts of Iowa and South Dakota, Wisconsin and Ohio could be among those that may need to supply states that may not have -be not enough corn to meet the demand in their area. The trick will be the cost of moving it further, especially with still-complicated rail logistics issues in some parts of the country.
And states that are expected to see lower yields will likely push the base higher than normal at harvest time, hoping to grab what they can.
In addition to lower expected yields, the FSA prevented US planting acreage estimates, which were released on August 22, were the third highest in seven years at 6.386 million total acres from 2 .1 million last year. Of this total, maize prevented the planting of 3.148 million against 640,000 last year.
At the start of the harvest there will be pressure on the base, but this will probably not last when the dust settles and the farmers with a good harvest have filled their bins. The tussle for commercial maize will be unbroken in the coming new crop year and farmers should be the winners at the end of it.
Mary Kennedy can be reached at [email protected]
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