The winter of 2010 is being recorded as one of the most severe in recent memory. Some areas have been hit harder than others, but the effects of the cold and snow may impact your business the rest of the year.
For instance, this year’s corn crop may already be affected by the weather in Texas. The optimal time to start planting corn in the Gulf Coast and Central Texas regions is about the third or fourth week of February, with planting continued into mid- to late-March, according to Travis Miller, Texas AgriLife Extension Service agronomist.
“But the Gulf Coast has been (too) wet for four months or more,” Miller said. “Central Texas is pretty much the same. No field work has been done; no fertilizing, no land preparation. There are lots of weeds in the fields. We’re very close to planting time and absolutely no field work has been done.”
Miller said if a few weeks of clear weather were to come soon, producers could move into the fields and get some land preparation done. If the planting is delayed by only a couple of weeks, there probably wouldn’t be much detriment to this year’s crop, though there is some risk associated with late planting.
“Late planting always increases the risk of heat and drought injury when we tend to have dry and hot weather mid-summer,” he said.
After an early winter decline, cash corn prices have recovered to the $3.60 per bushel level. That puts corn into cattle feeding rations around the $7 per hundredweight level.
Despite recent gains, grain analysts expect the corn market will struggle to continue higher in the near term. That’s because large U.S. supplies and favorable South American crop weather have put pressure on the market, and demand has been called lackluster. Corn growers are also expected to increase sales of stored grain due to the market’s recent rally.
Certainly there is ample time for field work in the major U.S. corn growing areas before there is concern for a shortened crop in 2010. But this winter has also affected the price and performance of livestock that is produced with corn.
Since the market low of $80 in December, cash fed cattle prices have rallied $9 to $10. Much of that price rally is directly due to the severe winter as carcass weights are running 10 to 15 pounds below year ago levels, helping keep beef tonnage down.
The weather has also delayed placements of cattle into feedyards, which, in turn, is likely to reduce overall beef production for the year. That may translate into better prices for beef, assuming consumer demand is adequate.
Restaurants, especially on the East Coast where record snows hit last week, report dramatic declines in business, while retail outlets saw an increase in sales as consumers hunkered down. As the weather warms restaurants are hoping business picks up again. If so, demand for beef and other meats could see a significant boost that would also be supportive of prices.
Source: www.cattlenetwork.com
