Looking back at 2021: Drought, markets and more
With one of the more severe droughts on record in the region striking in 2021, weather conditions hit livestock producers, crop producers, markets and more. And though drought certainly was tied to some of the other big stories of the year, it certainly wasn’t the only story. Here are a few others that caught attention in 2021.
With one of the more severe droughts on record in the region striking in 2021, weather conditions hit livestock producers, crop producers, markets and more. And though drought certainly was tied to some of the other big stories of the year, it certainly wasn’t the only story.
2021 drought had ranchers slashing herds, putting cattle on the move
Here are a few others that caught attention in 2021:
Wheat goes from follower to leader and cash markets lead the way
At the beginning of 2021, wheat was a mere side note to the acreage battle between soybeans and corn. Soybeans were flying high, with corn coming along for the ride to maintain acres while questions about ethanol demand remained.
Wheat, though? "I see wheat as being a follower," DuWayne Bosse with Bolt Marketing said in Agweek’s first market outlook of 2021.
And for a time, that was true. Wheat was a non-story through early 2021. But as spring began and drought expanded, the spring wheat outlook got worse and worse. By the end of May, Randy Martinson of Martinson Ag Risk Management said that while winter wheat conditions were good, the same could not be said for spring wheat.
Spring wheat prices climbed as comparisons to 1988 — a famously droughty year — became more prominent. With other supportive news in the August World Agricultural Supply and Demand Estimates report, wheat closed at eight-year highs .
The U.S. Department of Agriculture's Quarterly Stocks and Small Grains Summary in late September dropped wheat stocks to 1.78 billion bushels, compared to 2.16 billion a year before, and all wheat production was lowered to a 19-year low of 1.65 billion bushels. Cuts came to winter wheat and, as expected, to spring wheat. USDA estimated 11% of spring wheat acres were abandoned nationwide, including 25% in Montana, 18% in South Dakota and 5% in North Dakota.
And it hasn’t been just the U.S. having wheat stock issues. The October WASDE report put wheat ending stocks at 14-year lows . The next week, Minneapolis wheat got above $10 for the first time since 2012.
The November WASDE moved domestic ending stocks up, but they were still the lowest in 14 years, and global ending stocks were further reduced.
As news continued to push wheat higher, North Dakota State University ag economist Frayne Olson asked “What are you waiting for?” to farmers with as-yet unsold wheat.
"We have near record highs on the futures market, we've got exceptionally tight basis levels for old crop wheat," Olson said. "I just don't see a lot of additional upside lift . . . into the spring wheat market beyond what we have right now."
More recently, the stories in wheat have focused on the spread between milling quality wheat, like the spring wheat traded on the Minneapolis exchange, and feed quality wheat, like the winter wheat more commonly traded in Chicago and Kansas City, and on a lack of demand for U.S. wheat despite short world stocks, with Martinson in early December labeling sales “nothing short of disappointing.”
Another market news item tied to the drought has been the way cash trade has pulled corn and soybeans along. Demand has been high for the crops in the drought-stricken areas as processing plants seek corn ethanol and soybeans for soybean oil, which is often used in biodiesel production, or soybean meal, used as animal feed.
For instance, western North Dakota ethanol plants had to pay more for corn and bring in supplies by rail because of a dearth of nearby corn due to drought . And cash trade stayed strong through the end of the year. In soybeans, oil had been the driver for quite some time , but meal became an important factor later in the year , in part because of a lysine shortage that made meal more valuable as a livestock feed.
Dicamba concerns continue
A new Environmental Protection Agency map for 2021 showed seven counties in North Dakota with an endangered species designation, 10 counties in South Dakota, 10 counties in Minnesota, 12 counties in Iowa and several in Nebraska listed. That meant big changes in how the herbicide could be applied in those places because of EPA regulations meant to protect endangered species. Larger buffer zones were required in those counties.
The move came as a surprise to weed control professionals as well as state-level regulators. In 2019 and 2020 there were no endangered species limitations for North Dakota, even though there were for some counties in Minnesota and South Dakota. Additional counties were added in those states.
But that wasn’t the only dicamba-related issue in the news in 2021. Dry, windy conditions during the peak time for spraying also caused problems. It greatly reduced the amount of time in which spraying could be done, though some applicators said it still was better than wet conditions in 2019. With dry soils, many farmers have had to run irrigation systems just to activate herbicides, and even then, the performance of pre- and post-emergence products was disappointing.
Off-target dicama damage to soybeans was believed to be at a high in 2021 , but since drought could exacerbate or even mimic the effects of dicamba, weed control officials couldn’t be certain.
In Minnesota, complaints about dicamba damage doubled in 2021, leading officials in December to seek stricter controls on the use of the herbicide in soybeans.
Sunflower screenings and Palmer amaranth
Palmer amaranth is not exactly new in the region, and infestations have been known to come in a variety of ways. In 2021, infestations believed to be tied to sunflower screenings fed to livestock became somewhat prevalent.
Minnesota already had put limits on feeding sunflower screenings because of how hard it is to keep Palmer amaranth seeds out of the screenings. North Dakota has warned livestock producers, many of whom were in need of supplemental feed because of the drought, to be cautious when feeding screenings.
A good fall for sugarbeets
Many northern Plains crops suffered in the 2021 drought, but sugarbeet companies in the region saw a surprising turnaround late in the season. Late-season moisture and heat led to frustrating harvest conditions but also allowed for a big increase in tonnage over what had been expected.
Southern Minnesota Beet Sugar Cooperative in 2021 harvested the highest tonnage per acre in the company’s 47-year history with around 36.5 tons per acre, a record by 6 tons. The company was surprised that the crop produced such a large amount of sugarbeets because early on, the growing season was dry. Then rains started falling in late summer, and the amount of growth during that two-month period was unprecedented.
“We're very surprised. Nobody saw that coming. We thought in mid-August when we made our last prediction on our root samples that we were going to be about 30 tons per acre," Todd Geselius, Southern Minnesota Beet Sugar Co-Op vice president of agriculture, said. “Then it just rained and rained and stayed warm, and that kind of changed everything.”
Minn-Dak Farmers Cooperative expected a 25-ton crop based on samples in August. Then, the rain started falling.
“Yield growth rates we’ve never experienced in the history of the co-op,” said Kurt Wickstrom, president and chief executive officer. The crop ended up over 31 tons per acre.
For American Crystal Sugar , tonnage improved about 2.7 per acre after late summer and early fall rains, ending up at 28.7 tons per acre.
“That was desperately needed, and it turned our crop around,” Steve Rosenau, American Crystal Sugar Co. director of agriculture, said. “It went from being a less than average crop to about an average crop.”
The COVID-19 vaccine was welcomed by many but mandates for it were not as well received in some places.
U.S. Department of Agriculture personnel, including Farm Service Agency county committee members , were concerned about losses of employment, and some farmers were concerned about not having enough personnel in the offices.
Refusing to comply with mandates also led some people, including now former Mayo Clinic nurse Amanda Volsen , to lose off-farm jobs. But some farmers, including Kelly Erickson of Minnesota, urged people to take the shot. Erickson suffered a severe bout of the disease himself and lost his father to it.
Fraud cases in agriculture have been of high interest in recent years, and the criminal prosecution of one such case wrapped up in 2021. In November, former feedlot operator Robert “Bob” Blom of Corsica, South Dakota, was sentenced to 97 months in prison and three years of supervised probation for a large-scale fraud that related to his operation of a custom cattle-feeding business. He had pleaded guilty in August.
The case involved losses of $24 million from 30 victims over a course of five years — including one victim who lost more than $3.75 million. The case dragged out over a couple years , in part because of how complicated it was.