Rain makes Grain
No more than 7 days ago, the NWS was predicting an extended period of high temperatures and low precipitation. The 15- and 30- day forecast looked miserable with several days forecasted above 100 degrees. However, this summer's weather patterns appear to be erratic and difficult to predict.
Within the last 5 days, we have received approximately 4 inches of rain in southeast Rooks County. Rooks Countys Drought Severity and Coverage Index (Drought Statistics) dropped from 145 (April 22) to 37 (July 22). In addition, recent rains have improved pasture conditions and stock pond levels.
However, row crops remain challenging from an economic standpoint. With sorghum input costs of $360 per acre and a county average yield of 80.0 bushels per acre, the breakeven price for sorghum is approximately $4.50 per bushel. Since the current market price is only $3.25, this would mean a breakeven is tedious at best.
If you rework the calculations at a market price of $3.25 per bushel, you will need a yield of approximately 111 bushels per acre. This is significantly higher than the average yield, meaning you'd need either exceptional growing conditions or cost reductions to make a profit at that price. If basis/price continues to slide, this model will become even more problematic. The question remains; will recent rain generate enough bushels to close the break-even gap?
In general, much-needed rain has improved conditions. Prices are another story. As we slide into the fall season, farmers need to find demand for their products (corn, soybeans, and sorghum) in the domestic and global markets through fair trade policies.