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Market impact unlikely here from north Plains’ drought
 
By MATTHEW D. ERNST
Missouri Correspondent
  
DICKINSON, N.D. — Drought in the Dakotas has stimulated selloffs in North Dakota’s cow-calf herd and brought poor crop ratings to the spring wheat crop. But drought in the Dakotas and Montana is not likely to impact cattle pricing in the eastern Corn Belt, with wheat price impacts also likely minimal.
 
Cow-calf ranchers in North Dakota, where the spring drought is most severe, are selling off cow-calf pairs and preparing for early weaning for remaining animals. Sales barns have added weekly cow-calf sales in central North Dakota, where drought conditions are most severe.

Stockmen’s Livestock Exchange, in Dickinson, reported nearly 4,000 head sold in two special cow-calf pair sales on June 8 and 13. Sales barns also reported heavy slaughter cow volumes, twice the normal rate for the season. Many cow-calf pairs will head to Nebraska grasslands, according to Andrew Griffith, University of Tennessee cattle marketing specialist.

“There are several regions of the country that can absorb cow-calf pairs right now, and the unfortunate situation for North Dakota producers is an opportunity for producers in surrounding states,” he said. “These animals will continue to stay in the cattle herd and follow normal production until their useful reproductive life comes to an end.”

The Dakota selloff is unlikely to impact this fall’s feeder cattle markets outside the region, Griffith said. “The one thing it could do is result in a few more animals entering the feedlot early,” he said. “It may slightly support prices  this fall, but I doubt we will be able to distinguish thesmall impact because all of the other factors are pointing toward a strong fall market, relative to last year. Fall feeder cattle prices “will be softer than they are today, but tremendously higher than last fall,” he added.

Rains this week could help grass recover in North Dakota, and good pasture management there will help ranchers have feeder cattle to background or offer for fall sale. “Producers can save more than 25 percent of available summer pasture forage with early weaning,” said Kris Ringwall, beef specialist at the Dickinson Research Extension Center.

Wheat market impact

The wheat crop, especially spring wheat, is also hit hard by lack of moisture. The USDA crop progress report for June 9 rated more than half of South Dakota spring wheat condition at “poor” or “very poor.” Montana’s spring wheat showed 31 percent of acreage, and North Dakota 17 percent, as poor or very poor.

The drought upped trading activity at MGEX in Minneapolis, resulting in record volumes on June 13. “Poor crop conditions in key hard red spring wheat growing regions have been a factor in the increased activity at MGEX,” said Mark G. Bagan, MGEX president and CEO.

“Producers are bearing the brunt of the drought and bad weather,” and are hedging with MGEX futures and options products, according to Bagan.

Those market impacts will not likely impact the markets for winter wheat grown in this region. Additionally, any weather yield impacts to wheat markets are offset by continued high wheat stocks.

This month’s USDA forecast indicated higher hard red winter and soft red winter wheat production, with a season-average farm price ranging $3.90-$4.70. One bright spot for wheat pricing: high-protein wheat, which will be relatively higher-priced than last year, according to USDA.

Yields fewer than 90 bushels per 
acre will depend on returns from double-crop soybeans to deliver profitability, according to a University of Kentucky analysis. Soybeans will also drive double-crop profitability in Tennessee, according to UT analysis.

In Tennessee, June/July 2017 cash wheat ranged from $4.40-$4.85 on June 16, according to the USDA Tennessee Cash Grain report.

A storm system tracking across the Dakotas last week finally lowered temperatures and brought 1-3 inches  of rainfall. “For the most part, the rains were not greatenough to make sizeable improvements to the drought, but where 1.5 or more inches fell, especially in eastern sections of the Dakotas, drought was reduced,” according to the U.S. Drought Monitor update.

High winds this spring have dried out soil and pastures and blown dust across much of central North Dakota. “If average temperatures were not as cool as they have been, and if we did not follow a significantly wet six-month period, conditions would be worse,” said North Dakota State Climatologist Adnan Akyuz. He predicts dry conditions will persist, in North Dakota, throughout the summer. 
6/22/2017