El Nino is diminishing but could stick around for growing season
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Jean Caspers-Simmet / Agri News
Elwynn Taylor, Iowa State University Extension and Outreach climatologist, talks to Kermit Allard, of Cedar Falls, at last week's Hawkeye Farm Show at the UNI Dome in Cedar Falls. Taylor gave his 2015 weather outlook to a standing-room-only crowd.
Jean Caspers-Simmet,
simmet@agrinews.com | Posted 1 hour ago
CEDAR FALLS — ISU Extension climatologist Elwynn Taylor projects a 2015 national corn yield of two to three bushels above the trend line, which is 162.3 bushels.
Speaking to a standing-room-only crowd at last week's Hawkeye Farm Show at the UNI-Dome in Cedar Falls, Taylor said he will update his information after April 15 when summer weather patterns become apparent.
Taylor said the Southern Oscillation Index, which determines if there are El Nino or La Nina conditions, was showing minus 8.06, an effective El Nino, in January. An El Nino, determined by sustained warming of the eastern topical Pacific Ocean, means a favorable growing season in the Corn Belt. Conversely, La Nina conditions with cooler waters in the eastern tropical Pacific result in a more troublesome growing season.
The SOI faded to minus 5.9 by Feb. 15 and now is minus 5.3, no longer strong enough to be dominated by El Nino conditions.
"Sometimes, it recovers, but more times, it just keeps going away, but it will not likely go beyond neutral," Taylor said. "The best guess is that it will not be a significantly strong El Nino, but it will not go in the opposite direction of La Nina."
Taylor follows National Oceanic and Atmospheric Administration's Klaus Wolter who said, "It's a confusing situation to say the least."
Taylor said at least some typical El Nino effects will be anchored because of a positive Pacific Decadal Oscillation state that has prevailed in the Pacific Ocean for all of 2014 and still might give a boost even though the El Nino is weak. A positive PDO doubles the strength of an El Nino.
"That may result in an El Nino-type effect for this growing season in Iowa," Taylor said.
In the early 1970s and again in 2004-06, El Nino diminished and then strengthened again, which produced good growing conditions.
When there is an El Nino, there is a 70 percent chance the country will have an above-trend-line yield, Taylor said. During La Nina years, there is a 70 percent chance of a below-trend yield.
Working with retired ISU grain marketing economist Robert Wisner, Taylor built a risk wheel that calculates the likelihood of various yields and prices.
Taylor's risk wheel calculates the highest possible national average corn yield at 195 bushels. The lowest possible yield is 81 bushels per acre. The most likely yield, based on current weather conditions, is 164 to 165.3 bushels per acre. The market is expecting a 170 bushel yield.
"That is a reasonable number," Taylor said.
If the yield is 178 bushels, corn will be less than $4 at harvest on the Chicago December contract. If it's 146 bushels, it will be worth more than $9.
"Climate risk is increasing," Taylor said. "It will be greater the next 20 years than the past. All your risk management the past 10 years has been practice. Now you're going to need it. "
The first year of a 25-year period of volatile yields was 2012, Taylor said.
"You have some advantages to make a profit out of this," Taylor said. "Chicago makes its money out of volatility. If you use the risk wheel, the greater the volatility the more money you'll make as well."
The market goes to the value of what the U.S. Department of Agriculture says in it's yield outlook, Taylor said. The USDA's numbers are often too high or too low, and farmers can determine what that difference is for the Corn Belt, their state and their farm.
Taylor said farmers should go to mesonet.agron.iastate.edu, and click on AgWeather. Farmers can track growing degree days, precipitation and weather stress for their farm, crop reporting district and state. Looking at the average for Illinois, Indiana and Iowa will tell them what's happening on a national basis. By tracking numbers for a good year, a bad one and the current year, farmers will know what yields will be.
Using an example, he showed how fields in the Butler County area have ample subsoil moisture. Growing degree days through the end of September were 175 fewer than normal after silking, which can result in a good yield.
"Being 100 to 200 GDDs behind after silking results in some of the best yields, but nobody seems to understand that but you," Taylor told farmers. "The biggest mistakes the markets made in the last 50 years were when the crop was 200 GDD behind and yield came in way higher than the markets thought it would."