us crop update october 2022

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US Crop Update – October 20, 2022

Summary

Steve Doench, Head of Sustainable Agronomy
Steve Doench, Technical Sales Agronomist
  1. Increasingly high crop input prices will need commodity prices to maintain pace to keep farming profitable in 2023. For now, corn prices are strong enough to generate a forecasted higher profit than soybeans when making initial crop planning decisions for 2023. However, due to a geopolitical environment, fertilizer prices are still a wild card.
  2. A dry September did not help add to grain/seed fill going into harvest. The dry conditions expanded drought conditions, making winter wheat establishment less vigorous going into winter.
  3. The long-term forecast shows the GFS and ECMWF in agreement for a drier and warmer than normal fall. Harvest will be completed earlier than normal and fall fieldwork should all get completed ahead of winter. Drought reduction will not occur and will likely expand into winter. This will likely cause the 2023 crops season to face soil moisture deficits from the start, but could possibly allow early planting.

Summer Weather Summary

A warmer and drier than normal summer reduced yield potential after a delayed early planting season. 

Percent of normal precipitation and departure from normal temperature data for June through August 2022 from High Plains Regional Climate Center

September precipitation was drier than normal, and temperatures were warmer than normal. These warm and dry conditions helped crops mature on time and ahead of any major frost issues, but did not help late-season grain fill. With crops already behind from early planting, this left an even greater strain on yield potential.

Percent of normal precipitation and departure from normal temperature data for June through August 2022 from High Plains Regional Climate Center

Drought Monitor

Over the course of the past month, drought has continued to build. The fall outlook does not appear to show any hope of alleviation. Without a wet winter and spring, drought will continue to remain an issue into 2023.

United States drought monitor maps for October, September, and May 2022 from US Drought Monitor

Economics

When it comes to pricing and economic outlook, corn is favored over soybeans going into 2023 with an expected yield of 190 (corn) over 60 (soybeans). This significant change raised anticipated return on corn by $30.50 and dropped return on soybeans by $9. Variable cost (VC) per acre and land costs are rising. While all fertilizer prices have been rising by 10% or more, UAN prices have increased by over 40% and ammonia increases surpassed 60%.

economic chart including corn and soybean crop prices and yield

Longer Range Forecasts

GFS and ECMWF generally agree on a warmer and drier fall period, but the GFS forecast shows a larger area with much drier and warmer conditions. This will help harvest finish up well ahead of normal but can lead to drier than standard grain weights and some lost yield at the elevator. Drought conditions will remain in place and expand as winter approaches.

GFS long-term forecasts

ECMWF long-term forecasts

Conclusions

Higher profit margins are expected for corn than soybeans this fall which will sway planning decisions for 2023. Additionally, the outlook continues to be dry and warm in the long-term forecasts. Drought will persist unless winter and spring predictions increase expected precipitation.

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