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Silver lining in feed opportunities, spring planting weather

PDPW

MADISON – With fears over the coronavirus still wreaking havoc, it could take time to understand and control the global market situation for 2020 and beyond. But agricultural economist Dan Basse of AgResource Company told attendees of the recent Professional Dairy Producers® (PDPW) virtual business conference there are indicators that bear good news for the year ahead.

For one, Basse told attendees U.S. feed prices will likely stay low or even fall during the coming months.

Dan Basse

“Now that phase one of the U.S.-China trade deal has been signed, the American farm sector is expecting better opportunities to sell commodities to our Asian customers,” Basse said. “Unfortunately, though, China has been tardy so far in making purchases.”

He went on to explain that 2020 will be the first time Brazil claims the title of being the world’s largest corn exporter, with other South American countries also ramping up production in an effort to compete against the United States in filling world demand for grain. Basse predicted the soybean market could be similar, as China is purchasing more Brazilian soybeans through August; with intentions of buying more American beans as our crop ripens in the fall.

“But then there’s the African Swine Fever component to take into consideration. Less livestock means demand for Chinese grain will be down this year, even though human consumption is strong.”

In terms of dairy, Basse pointed out that recent trade deals with China and our North American neighbors call for more sales of dairy products, such as cheese and non-fat dry milk.

Eric Snodgrass

In tandem with Basse’s session, principal atmospheric scientist for Nutrien Ag solutions Eric Snodgrass presented a 2020 weather outlook. His predictions include a better crop-planting window of opportunity for the Midwest. He pointed to indicators that suggest farmers will not see the large amounts of precipitation 2019 saw. The data also favors an early spring.

“I believe the groundhog got it right this time,” Snodgrass said. “Based on the recent polar-vortex patterns in the north pole and watching the trends of ocean trade winds, the National Oceanic and Atmospheric Administration (NOAA) is predicting an early spring.”

Snodgrass added that 2019 saw El Niño conditions while 2020 is emerging with La Niña-like indicators, thus creating slower and less extreme weather patterns. He foresees temperatures being warmer in the U.S. through the next four months compared to what was recorded for both 2018 and 2019. Rainfall is also projected to be adequate, with little chance for drought.

PDPW

Professional Dairy Producers® (PDPW) held the first-ever PDPW Virtual Business Conference March 18-19, 2020 in keeping with its commitment to presenting the 2020 annual business conference to its membership.