This spring felt like weather whiplash. We started off with one of the coldest and snowiest Aprils on record, with a major snowstorm in mid-April (when we usually start planting corn). It seemed like winter would never end until conditions started changing quickly in late April. May turned out to be one of the warmest on record. We basically went from winter straight into summer. Saturated soil from the April snowmelt followed by frequent rainfall in May led to major planting delays in parts of northern Iowa and southern Minnesota. Farms north of Highway 20 were consistently getting more rain. By late May, some farmers started switching to shorter maturity corn or soybeans instead of corn. Heavy rains after Memorial Day caused further planting delays across some of the hardest hit areas of the region, and left water standing in fields that were previously planted. Farmers still not able to finish planting by mid-June had a difficult decision to make, continue trying to plant or file for prevented planting through crop insurance. Heavy rains in late June caused flooding in the same hard hit areas as well as major flooding along rivers and streams across northwest Iowa. Some areas had 8 to 12 inches of rain in less than two weeks. The Big Sioux, Rock, Floyd and Little Sioux rivers all had major flooding as well as many smaller rivers and streams. Thousands of crop acres were flooded along these rivers, and many roads and bridges were closed due to the high water.
The land market has been fairly quiet over the past several months in Northwest Iowa, with one of the lightest volumes of sales we can remember for this period. Sales results that we have seen have been mostly as good as expected, while a few have struggled. As always, location is a big factor. Areas where there is strong influence from local farmers tend to correlate with the best sale results, while sales where the investor bidders are predominate will often end up at a lower level. This can be explained by human nature. Most farmers are interested in a piece of ground close to them, and chances are they’ve been looking at it over the fence for decades! In strong neighborhoods, they realize that there may be one chance in their farming career to purchase such a piece. In many cases, local farmers with livestock operations also have the advantage of a ready supply of livestock manure that could easily be transported to a close-by land purchase, an option that an investor may not have. This is a factor in many sales we have seen, especially in strong livestock areas where available land to spread manure may be at a premium.
The corn and soybean markets enjoyed their best sustained uptrends of the past three years from mid-January into late May. Since Memorial Day, it has been another story. Both crop prices did a major nosedive in June based mainly upon excellent crop condition ratings plus rising concerns over tariffs and trade wars. First, let’s discuss January-May price activity. From October 1st to January 12th, local cash corn prices languished between $2.90 and $3.16, averaging $3.04. Beans ranged from $8.68 to $9.28, averaging $8.92. After USDA’s final production report for 2017 on January 12th, prices finally began improving
The springs of 2016 and 2018 demonstrated the huge benefit of tile drainage. In each of these two years, most pattern-tiled farms were planted in April. Those farms needing additional tile drainage were not planted until later in May. Mother Nature can throw you some curves with too much rain. Sometimes even pattern-tiled farms cannot be planted timely, which happened in areas of northern Iowa this year. Each growing season is different in how planting dates affect yield. In 2016, even late planted corn and soybeans had record yields. Iowa State University studies show that corn planted after May 10th begins losing yield potential. That lost yield may worsen if planting occurs after May 15th. Final planting date for corn to get full coverage under Federal Crop Insurance is May 31st. Today’s hybrids may not show as much loss from delayed planting as several years ago; however the optimal planting date for corn is usually April 15th to May 10th.
