The region’s farmers are feeling relief after a difficult growing season, but manmade factors cast an ominous cloud over the rural economy.
“It’s definitely been an interesting year,” said Pat Swanson, whose family farms about 2,000 acres east of Ottumwa.
“A wet spring to a cooler summer and a delayed harvest” is how Colin Johnson, who farms near Agency, describes the 2019 growing season. “The weather threw wrenches, but it’s all worked out. We have a pretty good crop.”
“It’s been a difficult year all the way around,” said Steve Kuiper, who farms near Knoxville. “Field conditions have been tough, both spring and fall.”
After a cool, wet spring that slowed planting, Iowa farmers’ hopes for a routine harvest were scotched by the onset of winter conditions before Halloween. Last week’s USDA crop report showed harvest progress for both corn and soybeans in southeast and south-central Iowa about 12 percent off the five-year average, but yields were near-normal.
“Things turned out a little bit better than we had anticipated, considering the fall,” said Mark Licht, assistant professor of agronomy at Iowa State University. “For southeastern and south-central Iowa, it maybe wasn’t as bad as some areas in the state.”
The wet fall made for higher moisture, incurring added drying costs, and lower test weights that can mean price penalties at market.
“We matured so much later, and after we matured, we really didn’t have the warm temperatures to drive grain dry-down,” Licht said. “And when we did have warm temperatures there was so much moisture in the air.”
Still, producers took comfort in healthy yields. Production statewide should be similar to last year, when Iowa farmers raised 2.5 billion bushels of corn (excluding silage) and 565 million bushels of soybeans, according to the USDA.
“The consensus is that the yields were better than expected,” said Swanson. “Everyone seems pleasantly surprised. They’re not bin-busters, they’re not record yields, but they’re consistently above average.”
“Really good” is Kuiper’s assessment. “Yields are exceptional, test weights are good and good grain quality. The corn’s still wet. That’s a little bit of an issue.”
Kuiper said his corn’s moisture content ran about 18 to 22 percent. Typical market standards call for 15 percent moisture, and bringing it down to that level means added drying costs – as much as 22 cents per bushel at last week’s propane prices, according to the Iowa Department of Agriculture and Land Stewardship.
“On your own farm, it’s generally cheaper than when you have to pay on delivery,” Licht said.
“Our drying costs were higher than normal just because of the late harvest and we just didn’t have any drying weather during the harvest,” Swanson said. The propane that fuels grain driers ran short in some areas of northwest Iowa, but “I’ve only heard of a few in southeast Iowa who are having that issue,” she said.
How much is this crop worth? Corn averaged about $3.40 a bushel and soybeans $8.34 in south-central Iowa last week, according to the USDA. Last year’s statewide averages were $3.46 and $8.43 respectively, a significant drop from 2011’s $6.05 and $11.18.
Kuiper expects crop prices to rebound a bit.
“The market’s kind of in a seasonal termed right now,” he said. “The end of harvest, start of winter the market tends to slump a little bit. It’ll be interesting to see what the final numbers will be with harvest acres and yield.”
The Trump administration’s trade disputes with major importers of American grain and its grants of waivers exempting refineries from ethanol-content requirements are two big factors. The waivers have reduced ethanol demand by about 4 billion gallons – about 1.6 billion bushels’ worth. Ethanol accounts for about 40 percent of the nation’s corn crop.
“Probably bigger than even ethanol is the drop in exports this year,” said Chad Hart, associate professor of economics at ISU and a grain markets specialist. “That’s a 50-percent cut compared to last year, and that’s having an even bigger effect than the shenanigans over ethanol.”
“The farming economy is under some serious stress right now,” said Kuiper. “All of our political advocates out there in Washington, D.C. need to get these trade agreements ratified. That’d help a bunch.”
“This county, this state, this region is ideal for raising corn and beans,” said Johnson. “We’ve had bumper crops two years in a row, and supply’s bigger than demand right now primarily due to trade constraints.”
Nationwide, the USDA projects farm income to be about $88 billion this year. That’s the highest since 2014’s $92 billion, but nearly 30 percent below 2013’s record. And nearly 40 percent of that income is expected to come from government assistance for trade and disaster losses and other support payments. Much of that has yet to be received by farmers.
“Farm income’s going up, but the only reason it’s going up is due to government programs,” Hart said.