Global grain markets are at a pivot point, with prices finally starting to ease after a dizzying surge earlier this year. Where things go from here could end up being determined by farmers like Justin Sherlock and the extreme weather that’s hitting parts of the U.S. crop belt.
For Sherlock, like most of America’s farmers, crazy weather isn’t anything new. His North Dakota farm gets so much excess water every spring that the area his farm is in has been dubbed the Prairie Potholes for the puddles that form in the middle of fields. But this year has been exceptional. The deluge was so intense floodwaters submerged acre after acre.
Forget puddles. This spring, the rains were so hard it was more like his farm got dotted with miniature lakes.
“It’s been a struggle,” said Sherlock, who got about 75% of his planned corn and soybean crops into the ground before relentless rainfall forced him to call it quits in mid-June. “It's been such a long, kind of horrible spring, that I'll do what I can to grow the best crop I can this year, but I basically already decided to put my hopes on 2023.”
In any normal crop year, flooding on a field like Sherlock’s might not matter that much in the bigger picture of the global agriculture market. After all, North Dakota is a smaller player when it comes to corn, and powerhouses like Iowa and Illinois saw better conditions for spring planting. But as everyone knows, 2022 is anything but a typical year.
Russia’s invasion of Ukraine has stifled exports from a region that’s known as the world’s breadbasket. The disruption has sent crop futures to near-record highs, with stockpiles extremely tight. That’s adding to rampant food inflation and raising fears of global grain shortages. Markets have finally started to calm in recent weeks on optimism that key producers like Australia and the U.S. will reap harvests large enough to help replenish war-pinched reserves.
But in order to keep food inflation at bay, every bushel of U.S. acre will need to see maximum yield potential. And every bushel of grain will count.
“U.S. production will play an important role this year in stabilizing markets and any ‘bad news’ will push prices up on world markets,” said David Laborde of the International Food Policy Research Institute in Washington.
North Dakota, which provides crucial export supplies for terminals along the West Coast, is the epicenter of U.S. planting woes. But in the heart of the Midwest corn country, many farmers also faced delays. For weeks, government data showed national seeding progress was trailing historical averages.
Some farmers, like Sherlock, simply had to stop planting, with the goal of obtaining “prevent plant” crop insurance compensation. Others shifted from corn to soybeans, which can be sown later in the season. For the crops that did get seeded, the spring delays can continue to cause problems as the growing season continues. Yield potential generally declines if plantings occur outside the ideal window.