This Year Looks Just Like 1997’s Insanely Terrible El Niño

This Year Looks Just Like 1997’s Insanely Terrible El Niño

This year’s winter “will definitely not be normal,” NASA has said. It is, however, awfully familiar.

It’s not just the sea surface heights, like those above, that look alike—NOAA and NASA both confirm that they’re also seeing wind patterns and water temperatures that look eerily similar to the ‘97 conditions.

Researchers have been noting the budding similarities between 1997’s El Nino and our current conditions since early last year. With El Niño definitely having kicked off now though, it will almost certainly peak this winter. So what did we get last time an El Niño that looked like this hit hard in the winter?

1997-1998 was one of the warmest and wettest winters we’d seen over a century. There were record-breaking levels of snow, sleet, and rain all over the country. There were deadly floods in California, intense ice storms in the East, and a rash of tornadoes in Florida.

Exactly what particular cocktail of winter storms El Niño is mixing this year is still unclear—but if history is any guide, it will be a tough one.

Top image: NASA Earth Observatory map by Jesse Allen, using Jason-2 and TOPEX/Posideon data provided by Akiko Kayashi and Bill Patzert, NASA/JPL Ocean Surface Topography Team.

Soybean, Grain Prices Soar –

Grain and soybean prices soared as hot, dry weather in the Midwest stoked fears that U.S. crop production will fall short of expectations this year.

Soybean prices led advances, surging 4.6% to a one-month high, as traders fretted that adverse weather over the next week will damage the nation’s soybean crop during its critical growth stages. Corn prices followed soybeans higher as traders worried the corn crop, while further along in its development, also may suffer somewhat.

Associated Press

A soybean field in Illinois in June. Soybean prices surged 4.6% on Monday. .

Those concerns were bolstered by the U.S. Department of Agriculture’s latest weekly crop-progress report released after the markets closed on Monday. The report showed that the health of U.S. corn and soybean crops deteriorated last week. The USDA said 58% of the soy crop was in good-to-excellent condition as of Sunday, down from 62% a week earlier. For corn, 59% was good to excellent, down from 61%.

The one-day percentage gain in September soybean prices was the biggest for a front-month contract since October 2011 at the Chicago Board of Trade. Prices briefly hit the exchange-imposed daily limit of 70 cents before settling at $14.2775 a bushel, up 62.5 cents.


Corn prices also hit a one-month high. September corn, the front-month contract, rose 20.25 cents, or 4.1%, to $5.1575 a bushel. December corn, the contract most closely associated with this fall’s harvest, jumped 30.5 cents, or 6.5%, to $5.005 a bushel.

Wheat prices also rose, with CBOT September wheat climbing 20.25 cents, or 3.2%, to settle at $6.5475 a bushel.

Monday’s rally came after grain and soybean prices had tumbled for much of this year amid forecasts for big U.S. crops in 2013 and softer demand for corn from foreign buyers. Market participants largely have been anticipating huge crops this fall that would help replenish domestic supplies that shrunk to historically low levels after last year’s U.S. drought curtailed production.

But the U.S. soybean crop is seen as especially vulnerable to soaring temperatures and dryness in coming weeks as it goes through important growth phases. Also, the crop was planted later than usual due to a chilly, wet spring in the Midwest, making it more vulnerable to adverse late-summer weather.

“People are getting worked up over the weather, and with good reason,” said Jack Scoville, vice president of futures brokerage Price Futures Group in Chicago.

Traders are less concerned about corn supplies because the crop already went through its delicate pollination stage in many areas last month. “We’re going to have corn,” Mr. Scoville said. “But the beans could get very, very snug.”

In the next week, big farm states including Iowa, Illinois and Indiana will experience above-normal temperatures, including 100 degrees in some places, forecasts show.

“We have such a dry pattern across much of the Midwest over the next few weeks,” said Joel Widenor, an agricultural meteorologist with private forecaster Commodity Weather Group LLC. “Our view is that the worst of the dryness encompasses about 40% of the Corn Belt.”

Some analysts cautioned that the potential damage to the soybean crop could be less than feared, noting that soybeans have in the past shown resilience to stressful weather late in their growing season. Last year’s crop, for example, turned out better than some had expected despite the worst U.S. drought in decades, thanks to some timely late-summer rains.

“Crop conditions for soybeans could rebound around harvest time” in autumn, said Sid Love, an analyst with Kropf and Love Consulting in Overland Park, Kan.

Soybeans have rallied over the past week, due in part to concerns raised about the crop’s health during an annual crop tour in the Midwest last week.

The tour’s organizer, farmer-advisory firm Pro Farmer, projected a U.S. soybean crop this fall of 3.158 billion bushels, with a yield of 41.8 bushels an acre. That was below the USDA’s forecast this month of 3.255 billion bushels of production and 42.6 bushels an acre in yield.

Pro Farmer, based in Cedar Falls, Iowa, projected a U.S. corn crop of 13.46 billion bushels, with a yield of 154.1 bushels an acre. That would be down from the USDA’s August estimates of 13.8 billion bushels and 154.4 bushels an acre.

Write to Kelsey Gee at kelsey.gee and Ian Berry at ian.berry

A version of this article appeared August 27, 2013, on page C4 in the U.S. edition of The Wall Street Journal, with the headline: Crop Prices Sizzle on Hot Weather.


With Too Much Rain in the South, Too Little Produce on the Shelves –

With Too Much Rain in the South, Too Little Produce on the Shelves

FORT VALLEY, Ga. — Peaches, the gem of the Southern summer, are just not so sweet this year.

The tomatoes in Tennessee are splitting. Tobacco in North Carolina is drowning. And watermelons, which seem as if they would like all the rain that has soaked the South, have taken perhaps the biggest hit of all.

Some watermelon farmers in South Georgia say they have lost half their crop. The melons that did survive are not anywhere as good as a Southern watermelon ought to be.

“They are awful,” said Daisha Frost, 39, who works in Decatur, Ga. “And this is the time of year when they should be the bomb.”

Day after day, the rains have come to a part of the country that relies on the hot summer sun for everything from backyard tomato sandwiches to billions of dollars in commercial row crops, fruit and peanuts.

While the contiguous United States as a whole is about only 6 percent above its normal rainfall this year, Southern states are swamped. Through June, Georgia was 34 percent above normal, according to the National Oceanic and Atmospheric Administration’s National Climatic Data Center. Both South Carolina and North Carolina were about 25 percent above normal. Alabama’s rainfall was up 22 percent.

The weather is a particular shock because more than two-thirds of the region was abnormally dry or suffering a drought last year.

Although the total cost to farmers has yet to be tallied, agricultural officials in several states in the Deep South predict severe losses this year that could be in the billions of dollars.

“Nobody’s ever seen it this wet this long,” said Randy Ellis, a Georgia farmer who grows wheat and watermelons, the latter of which end up at East Coast grocery stores.

He usually pulls about 60,000 pounds of melons from an acre of land. This year, he said, he barely got 30,000 pounds. What is worse, the cooler, rainy weather meant the crop was ready after the important Fourth of July window, when prices are at their peak.

Standing water has made cornfields look like rice paddies in some parts of the rural South. Mold is growing on ears of corn, and in some fields entire stalks have toppled. Late blight, a funguslike pathogen, is creeping into tomato fields early and with unusual vigor.

Even though the Georgia pecan crop will not be harvested until fall, there are already worries that the rain will bring on a rash of the fungus commonly called scab disease. Experts are predicting that the crop could be about 15 million pounds lower this year.

There are a few pluses. Irrigation costs are down, and the rain has been surprisingly good for the look of Georgia peaches.

Here in the part of central Georgia where Duke Lane Jr. grows 30 varieties on about 10,000 acres, his fields have already taken on as much water to date as they usually do in an entire year.

“This is something that has never been on our radar,” he said.

Still, the peaches are bigger than usual and shaped perfectly. He had a single peach on his desk that weighed more than a pound.

But even though those peaches look good, the water has diluted the sugar content.

“The flavor is just not there,” said Doris Westmoreland, who works at Lane Southern Orchards. “It’s like having a mouthful of cotton.”

The rain is doing more than compromising quality and bringing on disease. Some fields are so wet that farmers have not been able to get equipment into the fields to harvest.

“With fruit and vegetables, you’ve got to hand-harvest it when it’s ready,” said Charles Hall of the Georgia Watermelon Association. “If you can’t get to it, you lose it.”

Some farmers report wheat sprouting before it can be harvested, and peanut farmers in Alabama, who rely on heavy applications of chemicals, have missed crucial application windows because fields have been too wet to navigate, said Randy Griggs, the executive director of the Alabama Peanut Producers Association.

Peanut harvest usually begins in late August and runs into September, so there is hope that fields might dry out by then.

But Jake Crouch, a climatologist at the National Climatic Data Center in Asheville, N.C., is not hopeful.

“Whenever we get in a pattern like this, we kind of stay in the status quo,” he said. “When we’re hot and dry, we stay hot and dry. When we’re wet, we stay wet.”


US corn harvest estimates fall – but so do prices

Lanworth, citing crop damage from hot and dry weather, cut its estimate for the US corn production, and Societe Generale cautioned over a downgrade too, although the caution failed to prevent prices losing ground in Chicago.

Lanworth downgraded its forecast for the US corn harvest by 265m bushels (5.0m tonnes) to 13.668m bushels, after “temperatures during much of the last two weeks exceeded forecast levels across US production areas, while precipitation fell 50-90% below normal”.

“Relatively dry conditions are expected to continue in Iowa, Kansas, much of Missouri, and Nebraska through much of the next one to two weeks,” the consultancy said.

“Without above-average precipitation during the final week of the month, precipitation this July could approach the historically low levels set last year.”

Indeed, the group cautioned over the potential for further downgrades in many largely westerly Midwest areas, including Iowa, the top corn-producing state.

“Initial field observations in central and northern Iowa indicate potentially significant yield losses due to poor planting conditions and establishment problems,” Lanworth said.

‘Significant problems’

Separately, Gail Martell, at Martell Crop Projections, said that “delayed planting dates, shallow rooting from a wet spring, and irregular development from a strung out planting campaign argue for a reduced yield in corn and soybeans”.

The comments follow a caution from Societe Generale that it might lower its estimate for the US corn crop to 13.4m bushels, from a forecast made last month of 13.9m bushels.

The US Department of Agriculture, whose data set market benchmarks, pegs the crop at 13.950bn bushels.

“We continue to hear reports of significant problems in portions of Iowa,” SocGen analyst Christopher Narayanan said.

Respected crop scout Michael Cordonnier reported after a Midwest tour that wet conditions had actually proved the biggest problems in Iowa, in preventing sowings.

“I saw hundreds of fields along the highway that were not planted to any crop due to the wet conditions,” he said, adding that USDA assessments of crop area on the state were “not accurate”.

“I can tell you from personal observations that there are hundreds of thousands of acres in north eastern Iowa and southeast Minnesota with no crops whatsoever.”

Key pricing point

Nonetheless, Dr Cordonnier added that “Outside of the super-saturated areas, the corn looks healthy, is dark green in colour and actually looks pretty good.

“If there is not an early frost, most of the corn in Iowa could produce an average crop.”

And Mr Narayanan cautioned over betting on price falls despite the potential for a crop far lower than the USDA has pencilled in.

Crop condition “remains above average and lacks any indication of last year’s precipitous drop”, he said.

While the market was “rightly concerned” over the weather threat, “especially in light of currently tight inventories, we see no serious threats yet to the US crop prospects and recommend selling any rallies.

“In our view, any production level above 13.0bn bushels will be bearish to prices.”

‘Average that counts’

Another US broker said that “while there are areas that are worse than others, every year we can expect to get those sore thumbs somewhere.

“It is the average that counts.”

And Iowa-based US Commodities flagged that “the weather maps continued to turn cooler and wetter as the new runs were released”, meaning less threatening weather for the heat-sensitive corn pollination process.

Corn for December closed 1.7% down at $5.02 a bushel in Chicago.


California Central Valley Shrivels Amid Dry Conditions –

HURON, Calif.—Two years of dry weather and regulatory water cuts are taking a mounting toll on California’s giant farm belt, forcing farmers to idle more fields and workers even as much of the rest of the Golden State continues to recover from a debilitating recession.

As they did last year after a dry winter forced state and federal water managers to cut their allotments, farmers here in the Central Valley again this year are letting fields go fallow after being advised they would receive as little as 20% of their contracted supplies of water from the mountains of Northern California.

Matt Black for The Wall Street Journal

Salvador Juarez picks onions in California’s Central Valley town of Huron, where fields and workers are being idled because of dry conditions.

At Harris Farms off Interstate 5, executives say they have opted to fallow 3,037 of their 14,000 local acres this year, compared with 2,600 in 2012, and plan to triple that to 9,236 acres next year. In so doing, the big farm expects to shed all but 500 to 1,000 of its 4,000 seasonal workers by next year, executives of the farm say.

David Wood, chairman of the company’s beef division, warned the economic fallout rippling across the sprawling valley is likely to worsen next year, as farmers have to make planting decisions for 2014 based on water cuts scheduled to extend at least until early next year.

“This year will be tough, but next year could be catastrophic,” Mr. Wood said. The production cutbacks aren’t expected to affect U.S. food prices much, because other growing areas such as Mexico can fill in the gap.

Exact estimates on acreage cutbacks throughout the valley, where much of the state’s $40 billion-a-year agriculture industry is based, haven’t yet been tallied, but farming officials expect them to be substantial. The amount of land used to plant cotton, for example, will shrink 24% this year to 280,000 acres from 367,000 acres in 2012, off from a five-year peak of 456,000 in 2011, according to U.S. Department of Agriculture estimates.

Officials of the 614,000-acre Westlands Water District, where Harris Farms is situated, say many of its farmers plan to fallow fields this year after the U.S. Bureau of Reclamation in March cut water allotments in their district to 20% of its normal amount. In 2012, the agency had cut the allotment to 40% from 80% in 2011, which was the last wet year in a state that frequently undergoes drought.

California’s mountain snowpack was 52% of its normal average April 1, when it is typically at its peak, compared with 55% the same time in 2012 and 165% in 2011, according to surveys by the California Department of Water Resources.

The slowdown comes as the Central Valley, one of the hardest-hit parts of California during the recession, has been regaining its footing. The unemployment rate in Fresno County, for instance, fell to 11.8% in May from 14.9% a year earlier, according to Labor Department estimates. California as a whole has been recovering, with unemployment falling to 8.6% in May from 10.7% a year earlier. The U.S. unemployment rate was 7.6% in May.


But with estimates of as many as seven jobs dependent on each one on the farm, business leaders here worry the economic recovery in the Central Valley will fizzle out, especially in towns wholly dependent on agriculture. Here in Huron, a town of 7,000 about 50 miles southwest of Fresno, businesses already report a falloff in sales this year.

“Water equals money here,” said Ron McIlroy, owner of McIlroy Equipment, an agricultural manufacturer that has seen sales fall 30% this year from the same time in 2012.

In Huron, even workers still in the fields are tightening their belts. On a recent break from hoeing in a melon field, 40-year-old Marta Patricio of Huron said that while she works 60 hours a week, she expects her hours to be sharply reduced soon. “I’m worried because I have to be able to work to sustain myself and my family,” said Ms. Patricio, a single mother of three.

That sentiment is hurting small-business owners like Ahmed Alarami, who estimates sales at his Buford Star Mart gas and convenience store in Huron have fallen 45% so far this year compared with last. As a result, he recently closed an in-store deli that had employed three workers, leaving only himself and one employee to run the rest of the business. “I’m thinking next year it will be even worse,” Mr. Alarami said.

Farmers blame the water shortages on a system they say exacerbates the impact of periodic dry spells, such as when flows are shut off in the Sacramento-San Joaquin Delta because of federal restrictions to protect species such as the endangered smelt.

Gov. Jerry Brown is backing a plan to overhaul the system by building twin diversionary tunnels, but it faces an uncertain outcome amid a flurry of lawsuits recently filed against it by opponents including farmers and environmentalists.

For now, farmers are making do the best they can. On his family’s 3,600-acre farm near here, Dan Errotabere recently drove his truck past some of the 600 acres of fields he is letting go fallow this year—almost twice as much as last year. He said that is forcing the farm to use half its normal level of 80 seasonal workers for tomatoes and other crops.

“This system,” Mr. Errotabere said, “does not work without water.”

Write to Jim Carlton at jim.carlton

A version of this article appeared June 27, 2013, on page A3 in the U.S. edition of The Wall Street Journal, with the headline: California Farm Belt Shrivels.