There is plenty to discuss in the world of Texas High Plains agriculture this week. Corn contracts rose, cotton in the Texas High Plains is suffering from excess moisture, and Governor Greg Abbott signed legislation creating a state-regulated hemp industry.
The DEC Corn contract opened at about $4.31 and saw a significant rally on Tuesday, reaching a contract high, following a lower-than-expected yield figure from USDA in the WASDE. National average yield forecast declined from 176 BPA in May to 166 BPA in June’s edition of the report. Prices rallied between the decreased yield and planting only 83% complete compared to a 2014-2018 average of 99% complete as of June 10. Emergence is even further behind.
The 2019 Texas A&M AgriLife Extension budgets for District 1 have break-even prices at $4.01 for corn, where yields are 225 BPA. If producers are comfortable with their yield this is a good time to consider pricing some old crop and new crop corn. There is a chance that prices will continue to rise on acreage and yield issues, however trade issues are still a concern. Having some crop priced for a profit is a safe bet.
A second reason to consider pricing some crop if it is currently in the profitability range is the seasonal patter. With the rally the last few weeks we’ve ‘snapped back’ to seasonal patterns, but typically around this time of the year the price turns around and declines based on certainty in total acres planted. (Image courtesy of Dr. Mark Welch’s June 11 Feed Grain Outlook which I highly recommend)
Cotton in the Texas High Plains has seen similar production challenges from excess moisture this spring. Texas planting is 15% behind the 2014-2018 average. In many areas of the panhandle cotton fields have been lost due to excess moisture and it is time to consider replanting options. As of June 10, 66% of the Texas cotton crop was rated Very poor to Fair, with only 34% good to excellent.
Given the current price direction, sorghum or short season corn are options to consider when considering a cotton replant option, if your operation is suited for those crops. The ’19 JUL Cotton contract activity is winding down and it is unlikely that price will vary much as we approach the close.
Basis in the Texas High Plains remained relatively constant for the week. Corn averaged +$0.19/bu, sorghum -$0.26/bu, and wheat -$0.09/bu.
You can find help budgeting and calculating break-evens for all your crops using the Crop Profitability Analyzer, at the bottom of the home page at Amarillo.tamu.edu
The Texas Weekly Cattle Auction Summary had total head sold at auction almost double the previous week (6,217 vs. 3,938), with dry weather making transport for sale easier.The bulk (90% of head at auction) were feeders, of which 66% were steers and 82% were heavier than 600 lbs. Prices were steady to $3.00/cwt lower. The average price for Medium and Large 1 steers 600-699 lbs was $138.24/cwt, and $131.64/cwt for 700-799 lbs.
Nationwide, prices are declining week over week on high supply of calves and increasing feed prices. Cattle on feed from May reported the highest number (11.82 million head) on feed since the series origin, with many of those timed for an August marketing.
Hemp:
Governor Greg Abbot signed legislation creating a state-regulated hemp industry this week. The law went into effect immediately. Last year, Congress removed hemp from the list of controlled substances and the 2018 Farm Bill legalized hemp production. The Texas Department of Agriculture must create rules regulating inspections, fees, and licensing PRIOR to cultivation of the crop.
MFP Payments:
USDA will not provide trade aid for farmers with unplanted acres.
“USDA is not legally authorized to make Market Facilitation Program payments to producers for acreage that is not planted. However, we are exploring legal flexibilities to provide a minimal per acre market facilitation payment,” Perdue said. But the farmers will need to plant a cover crop eligible for MFP payments.
Important Dates:
6/17/19 – Dairy Margin Coverage signups open
6/17/19 – Crop Progress, NASS
6/21/19 – Cattle on Feed, NASS
In the News:
The Hill – Texas governor signs law legalizing hemp, CBD products
Drovers – In The Cattle Markets: Summer Heats Up and So Are Brisket Prices
Feedstuffs – McKinney hopeful of China negotiations restarting