Harvest Update: Late start, wet crop drives up prices

(Photo by Randy M. Cauthron) The unusually early snowfall and a wet month are working against farmers who are trying to complete harvest. The planting season's late start has some growers behind schedule and reduced yields could result in higher market prices. [Order this photo]

Producers may get higher prices for their harvest this fall, but the late planting start and an early freeze may bring lower yields, according to Chad Hart, a grain marketing economist at Iowa State University.

"This frost/freeze within the past couple of weeks did have an impact on yields," he said. "Producers who got their crops in later than usual, may have lost some yield because of the freeze conditions we've had. Having that impact takes some of that production off the market and brings prices up a bit."

The market rates may be a kernel of good news for the Iowa growers who have a good location and timing.

"It will actually be a positive to them," Hart said. "Their crops were mature enough that the freeze probably didn't have an impact on their yields, so they'll gain. There will be others where the price gain is not enough to offset the yield loss they might have faced because their crop is not as mature as we'd like to see it at this time of year. It's a mixed bag for producers."

Along with the early freeze, moisture issues are continuing to slow down the process for a crop that's been behind every step of the way in the 2009 growing season.

"Last year's crop faced a lot of the same problems," Hart said. "We had a crop that was later -- late maturing and it was being harvested at a higher moisture content -- than we'd usually like to see. The elevators have some quality concern issues if they look at this year's crop because of the high moisture."

Ideal conditions helped the harvest process Sunday and Monday, but the Spencer-area forecast isn't as promising. The National Weather Service in Sioux Falls, S.D., expects rain to return Tuesday night. Precipitation remains likely Wednesday and Thursday.

"We need to get that crop out as soon as we reasonably can, because in this case, once the crop has went through a freeze like this that stops the growing process," Hart said. "You're just waiting for it to dry up so it can be harvested."

The marketing economist also said producers need to be looking at where the market is on a daily basis, with recent trends suggesting significantly higher prices compared to prospects near the end of September. Hart said individual growers need to look at the possible returns of both storing and marketing their grain.

"The issue with storage is going to be that this crop is wet," he said. "As producers look to store it, they have to figure out how to deal with this wet corn. That usually means spending a lot more on drying it down to a proper storage."

Grower who also stored corn in 2008 risk blending two consecutive damp years.

"Continue to watch the market, especially given the delays in the harvest that we've had here," Hart suggested.