Published: July 8, 2014 11:46AM
Last changed: July 8, 2014 12:44PM
Carol Ryan Dumas/Capital Press
Swathing takes a break in this alfalfa field in Jerome Idaho, on Tuesday morning, July 8. Idaho is down 10,000 in hay acres harvested this year, a surprise to some in the industry.
Harvested hay acres dropped slightly this year in the U.S., but some big increases in Washington and Oregon have growers there surprised and doubtful of USDA’s reported numbers.
While U.S. hay acreage has dropped slightly compared to a year ago, increased acreage reported in individual states last week by USDA’s National Agricultural Statistics Service comes as a big surprise to growers.
Nationwide harvested acreage of all hay at 57.6 million acres is down 611,000 acres from
58.3 million acres in 2013. But acreage is up 160,000 in Washington and 30,000 in Oregon, according to the report.
Those increases seem unrealistice, according to growers in Washington and Oregon who represent their state hay associations.
At 920,000 acres, Washington alfalfa acres are up 60,000 acres, and other hay is up 100,000 acres, USDA reported.
“Flaws in the numbers — that’s my first thought,” said Loren Lentz, president of the Washington State Hay Growers Association, who farms north of Spokane.
“I’m going to guess there’s something wrong. I can’t think where it would have gone in,” he said.
More acres did go into Timothy hay due to demand and price, but fall planting of hay acres in the Columbia basin were more likely to have been down because prices were down through fall, he said.
California buyers did come in through winter and spring and cleared out a lot of Washington’s excess of lower quality Timothy and alfalfa and raised prices, so producers could have planted more in the spring. But that crop won’t produce until next year, and it could even take two years to establish well enough to harvest, he said.
He hasn’t seen any big swings in hay acreage in his northeast area.
Lentz said Washington’s first cutting was some of the best hay in quite a while and prices are good. Washington won’t be competing with California this year on export hay due to California’s short water situation, so things are looking good on that front, he said.
At 1.05 million acres in total, Oregon is down 10,000 acres in alfalfa but up 40,000 acres in other hay, USDA reported.
“That’s a big number. It’s a tough one to believe,” said Greg Mohnen, a Bend, Ore., hay grower and vice president of the Oregon Hay and Forage Association.
He’s heard that growers were increasing acreage because of high hay prices, but he doesn’t know where it would have gone in or what producers would have taken out of production to make room for more hay, he said.
If the acreage numbers are correct, that excess hay will be going to California, he said.
California’s total acreage, at 1.4 million acres, is down 70,000 acres. Alfalfa acres are up 30,000, and other hay is down 100,000 acres, USDA reported.
It’s certainly no surprise that acreage is down, said Spencer Halsey, executive director of California Alfalfa and Forage Association.
He doesn’t know if the association’s members agree with the numbers, but the short water supply is being diverted to more permanent crops or highest value crops, he said.
It’s an interesting situation for hay growers in California because hay prices are high. Water is tight, but if they have the water, they can make more money on hay than some other crops, he said.
Idaho’s hay acreage, at 1.5 million, is down 10,000 acres — 40,000 less in alfalfa and up 30,000 in other hay.
Some of that loss could be in lost seeds and stands in small basins due to drought challenges, but those losses shouldn’t be enough to bring acreage down as much as USDA reported, said Glenn Shewmaker, extension forage specialist with the University of Idaho in Twin Falls.
Due to high prices and lower input costs, alfalfa would bring better returns than most other crops. He doesn’t understand the drop in acreage in Idaho or nationwide, he said.
He would have thought more corn acres would have been converted to alfalfa. Inputs for alfalfa are lower than corn and with current prices, growers could net a couple of hundred dollars more per acre than many other crops, he said, adding USDA’s numbers are suspect.
Hay area harvested
Area all hay 2013 all hay 2014
Calif. 1,440 1,370
Idaho 1,480 1,470
Ore. 1,020 1050
Wash. 760 920
U.S. 58,257 57,646
USDA Reports Record High Soybean Acreage, Corn Acres Down
Targeted News Service — WASHINGTON, DC — June 30, 2014 — The U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) estimated a record high 84.8 million acres of soybeans planted in the United States for 2014, up 11 percent from last year, according to the Acreage report released today. Corn acres planted is estimated at 91.6 million acres, down 4 percent from last year, representing the lowest planted acreage in the United States since 2010.
Following up to the Prospective Plantings report released in late spring, NASS surveyed approximately 11,000 segments of land and 71,000 producers during the first two weeks of June to gather information on what farmers actually planted. Key findings released in the Acreage report include:
Soybean area for harvest is estimated at a record high 84.1 million acres, if realized, up 7.4 million acres (11 percent) from 2013.
Record high planted acreage is estimated in Michigan, Minnesota, Nebraska, New York, North Dakota, Ohio, Pennsylvania, South Dakota and Wisconsin.
Ninety-four percent of all planted acres of soybeans in the United States are biotech varieties, up from 93 percent last year. Corn
Despite the decrease in corn acreage, the 2014 corn planted area still represents the fifth largest corn acreage in the United States since 1944. Growers expect to harvest 83.8 million acres of corn for grain, down 4 percent from last year.
Ninety-three percent of all corn acres planted in the United States are biotech varieties, up from 90 percent in 2013.
All cotton planted area for 2014 is estimated at 11.4 million acres, 9 percent above last year.
Upland cotton is estimated at 11.2 million acres, up 10 percent from last year.
Ninety-six percent of upland cotton planted acres are biotech varieties in the United States, up from 90 percent in 2013.
NASS today also released the quarterly Grain Stocks report to provide estimates of on-farm and off-farm stocks as of June 1. Key findings in that report include:
Soybeans stored totaled 405 million bushels, down 7 percent from June 1, 2013. On-farm soybean stocks were down 36 percent from a year ago, while off-farm stocks were up 12 percent.
Corn stocks totaled 3.85 billion bushels, up 39 percent from the same time last year. On-farm corn stocks were up 48 percent from a year ago, and off-farm stocks were up 32 percent.
All wheat stored totaled 590 million bushels, down 18 percent from a year ago. On-farm all wheat stocks were down 19 percent from last year, while off-farm stocks were down 18 percent.
Durum wheat stored totaled 21.5 million bushels, down 7 percent from June 1, 2013. Both on-farm and off-farm stocks of Durum wheat were down from the previous year, 6 percent and 8 percent, respectively.
The Acreage and Grain Stocks reports and all NASS reports are available online at www.nass.usda.gov
Corn futures closed sharply lower on the day, registering losses between 18-23 cents. The trade had a bearish reaction to the Quarterly Grain Stocks and Planted Acres reports released earlier this morning. Average trade estimate for corn acreage from USDA this morning was 91.709 million acres according to a Reuters survey, with USDA pegging the actual figure at 91.60 MA. That wasn’t a big enough cut to be bullish. The average stocks estimate was 3.723 billion bushels, with actual USDA figure coming in at 3.854 bbu. Weekly export inspections last week were 872,960 MT, off from 988,080 MMT the prior week. YTD shipments are now 37,842,772 MMT, which compares to 14,774,469 MMT at this time last year. Crop conditions increased this week, with the Brugler500 index keyed to USDA ratings rising to 389. It is also above last years 373 for this date.
Jul 14 Corn closed at $4.24 1/4, down 18 3/4 cents,
Sep 14 Corn closed at $4.18 3/4, down 23 1/2 cents,
Dec 14 Corn closed at $4.25 1/4, down 22 cents
Mar 15 Corn closed at $4.36 1/4, down 21 3/4 cents
Soybean futures closed sharply lower on the day, registering losses between 31 and 72 cents. The bearish reaction is being attributed to the Quarterly Grains Stocks and Acreage figures released earlier this morning. Trade estimates for the USDA Planted Acreage report called for 82.2 ma of soybeans, with USDA pegging the actual figure at a record high 84.839 MA. The average guess for the June 1 stocks figure at 382 million bushels, with the actual figure coming in at 405 mbu. Weekly soybean export inspections were reported at 72,804 MT, down from 61,919 MT last week. The Brugler500 crop condition index increased 1 point from last week to 381. Last year at this time the figure stood at 370. Soybeans emerged came in at 94%, up from the 90% figure last week.
|Jul 14 Soybeans closed at $14.00 1/2, down 31 1/2 cents,|
|Aug 14 Soybeans closed at $13.29 3/4, down 48 1/4 cents,|
|Sep 14 Soybeans closed at $11.93 3/4, down 72 1/4 cents,|
|Nov 14 Soybeans closed at $11.57 1/4, down 70 3/4 cents,|
|Jul 14 Soybean Meal closed at $458.30, down $11.50,|
|Jul 14 Soybean Oil closed at $38.85, down $1.13|
Wheat futures closed 15 to 20 cents lower on the day. The wheat trade also had a bearish reaction to the USDA report earlier this morning, with the July 14 CBOT contract displaying the most weakness and closing at $5.64. Trade estimates for the USDA Planted Acreage report called for 55.77 ma , with the actual figure being reported at 56.47 MA. Spring wheat acreage was up 700,000 from the March intentions, with most having expected a drop due to switches to soybeans. That didn’t happen. The average guess for the June 1 stocks figure was for 595 million bushels, with the actual figure coming in at 590 mbu. The overall winter wheat crop condition rating was again UNCH, with the Brugler500 index at 269. The HRW subindex improved by 2 points TO 247, while the SRW index was down 2 from the previous week to 363. USDA reported 43% of the winter wheat crop has been harvested, behind the 48% average for this date. Major producer Kansas is lagging behind at 40% vs. the usual 66% for this time
|Jul 14 CBOT Wheat closed at $5.64 3/4, down 20 1/2 cents,|
|Jul 14 KCBT Wheat closed at $7.10 1/2, down 15 1/2 cents,|
|Jul 14 MGEX Wheat closed at $6.67 1/4, down 15 3/4 cents|
To refrain from guessing why grain markets closed higher the day of the USDA report, July 11th, I will let the dust settle and over the weekend, when there is time to break down 40 pages of information. I will have a report Monday July 15th based on the full facts versus a knee jerk reaction.
However, the rally after the USDA report may have more to do with a weak and falling US Dollar for the past two days than what now looks bearish based on the report.
To say commodity markets have been volatile is almost an understatement. The grain markets are a yo-yo. Thursday, after the World Supply and Demand Report was a good example. Grains after the report were lower, then higher, with corn moving lower a second time and finally finished higher. Why? In the commodity industry guarantees are something that should never be done, but I can guarantee over the next few days, there will be all sorts of reasons given for the volatility.
Whether you are speculating, or hedging and if you are using fundamental supply and demand information with the hundreds of reports released every day, it can be terribly confusing. Because commodities are a zero sum market, every buyer has a seller and every seller a buyer, reports have on any given day just as many bullish reports as there are bearish. Below are a few different reports just for example I picked from daily alerts I receive on Russian wheat. Over the following week there will be plenty of reports on the WASDE Report that have differing views.
Russia’s wheat prices fall despite concerns over drought
Wheat price surges: NAB
The Land Newspaper
Russia: 2013 wheat production revised down to 52.4 mln
As you can see, each day there are different reports that have differing views. So how do you decide what report you want to use? After all, using one report over the other may make a trader several thousand dollars, or may lose a trader several thousand dollars. Common Sense Approach
When reading any report, it is necessary to use common sense. Don’t go making news or a report something to fit how you want a market to move, or how a reporter wants to convince you what the market direction may be. In other words, make sure what you read can be verified.
Also don’t fight the facts. How many times have you heard, “I don’t believe how the USDA could come up with that junk? It can’t be right.” USDA reports are as good as the information sent back on surveys. They query a large sample of various people and groups for all reports. Above all, it is the information the entire world will use.
Over the next few weeks, reports of all kind will surface about weather and crop conditions. As you see from the headlines above and the reports that go with them, the number of commentaries coming out about US grains and the effect of weather will be as varied and numerous as there are stars in the sky. Be honest with yourself when making decisions. Don’t go wishing on stars hoping markets go your way.
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