Wednesday, 3 May 2017

Crop failures in USA as a result of extreme weather events

These are the headlines that we are likely to see more often in the very near future.

Nobody that I know of, except Guy McPherson has talked about habitat and the inability to grow grains at scale in the continental landmasses – and the dependence of the human animal on these crops.

Coming headlines are likely to be about simultaneous crop failures in different parts of the planet.

From then it is all downhill!


1 May, 2017

Blizzard conditions and heavy snow swept western Kansas, including 14 to 20 inches in Colby in the northwestern quadrant of the No. 1 winter wheat state in the nation, said the Weather Channel. “We lost the western Kansas wheat crop this weekend. Just terrible,” tweeted Justin Gilpin, chief executive of the grower-funded Kansas Wheat Commission.

The snow and freezing weather struck a winter wheat crop that was developing faster than usual, thanks to a mild winter. As a result, the crop was more vulnerable to spring snowfalls and frost. “Generally, temps below 32°F. for a minimum of about two hours will cause damage to the crop,” says the Kansas Wheat Commission. “Freeze injury during heading and flowering stages can cause severe yield consequences.” A quarter of the wheat crop was headed as of April 23, compared with the five-year average of 17%.

Most of @KansasWheat country shut down and no power. Devastating conditions,” Gilpin tweeted on Sunday afternoon. Some comments on Twitter were more hopeful: “Don’t give up yet,” said one, and, “Much-needed moisture but wheat will be flat on the ground when the snow melts.”

Kansas grew 1 of every 5 bushels of U.S. wheat last year, 467 million of the 2.31 billion bushels nationwide. Its farmers specialize in winter wheat, which is planted in the fall, goes dormant during the winter, and sprouts again in the spring. Winter wheat accounts for two thirds, or more, of the U.S. crop each year.

Nearly 90 crop scouts, an amalgam of grain traders, government officials, reporters, millers and a few growers, are to begin a three-day tour of the Kansas winter wheat crop today. “We will adjust on the fly if needed. Too many people flying in from around the world to postpone,” said Dave Green of the Wheat Quality Council, which sponsors the tour. The annual crop tour examines crop conditions, including frost and disease damage, to estimate the likely harvest. Its route begins in Manhattan in eastern Kansas, heads west to Colby, south to Wichita, and then returns to Manhattan.

The USDA will make its first estimate of the winter wheat crop on May 10. At its annual Ag Outlook in late February, the department projected wheat production would fall 20% this year because of low market prices and a sharp reduction in wheat sowings. Growers told USDA in March that they would plant the smallest amount of wheat land, 46.1 million acres, since records began in 1919.

The National Weather Service said Winter Storm Ursa was moving from eastern Colorado across the central and northern Plains toward the Great Lakes. From eastern Colorado through western Kansas into central Nebraska, “accumulations of at least 6 inches are expected with some locales tallying up a foot or more of snowfall.”

Get live updates from the Wheat Quality Council tour tomorrow at

This has just come in so I have no idea of the content

CO2, Climate Change & Food Security: Dr Lewis Ziska (April 2017)

"NATO and the United States should change their policy because the time when they dictate their conditions to the world has passed," Ahmadinejad said in a speech in Dushanbe, capital of the Central Asian republic of Tajikistan

Wheat Soars Most On Record After Freak Snowstorm Blankets Midwest

2 May, 2017

On Saturday, we discussed what may be the "last remaining cheap asset", namely wheat, which contributor Kevin Muir pointed out had been stuck in a vicious bear market for years, and added that over the past few years, "the weather has been as close to perfect growing conditions as a farmer could ask. 

All of the droughts have been on the West side of the Rockies, with the grain growing conditions on the other side experiencing ideal weather." He asked rhetorically, "how long this can continue. This winter the West Coast experienced a record amount of precipitation, will the opposite now happen in the plains?"

Incidentally, one may not even need adverse weather conditions to spark a buying frenzy. As Muir also noted, a catalyst for a spike may be purely technical: "this terrible bear market has not gone unnoticed by the speculators. Have a look at the net speculator position in the CBOT wheat contract. Specs have never been this short! Everyone believes prices can only go one way - lower! After all, we are all top performing bbq’ers and loves."

Muir, adding he is long grains, concluded that "few are talking about the real reason that grains offer a compelling risk reward from the long side. If this Central Bank experiment goes off the rails, we could have a return of 1970’s style inflation. That happens to coincide with the last great bull market in grains.  When you are busy dismissing the possibility of a 1970’s style bull market in grains, don’t forget - we all want to be contrarians, but it sure is hard. Don’t look now, but I think your steak is burning."

And while his secular thesis has yet to pan out, an unexpected "perfect storm" so to speak took place just 24 hours later, when wheat prices posted record gains in Chicago on Monday as the U.S. winter crop faced substantial losses from a freak winter storm that brought in snow and high winds that slammed into four Midwest states including Kansas, the top grower.

Satellite imagery shows a storm forming over the midwest from April 28 to May 1, 2017.
Satellite imagery of the storm forming over the midwest from April 28 to May 1, 2017

As David Streit, the senior lead forecaster at Bethesda, Maryland-based Commodity Weather Group LLC, said in a telephone interview cited by Bloomberg, more than 12 inches of snow fell on ripening wheat in parts of Kansas, Colorado, Oklahoma and Nebraska in the past 24 hours. And while it will take several days before the damage can be assessed accurately as the snow melts, early estimates suggest losses could exceed 50 million bushels, according to Pira Energy.

Couple this with the record net spec short in wheat and the result was today's record surge in July futures for soft red winter wheat, which is used to make cookies and cake, and which jumped 5.5% to $4.56 while corn prices climbed 3 percent in active trading.

The depth and weight of yesterday’s snow has certainly caused irreversible damage to some of the Kansas crop, given the advanced stage of development,” Peter Meyer, a senior director at Pira Energy in New York, said in a telephone interview. “We probably lost 50 million bushels in the area, and it may reach 100 million bushels depending on the weather the next month.”

The early indications were not good: Bloomberg adds that there were "many reports of snapped wheat stems, and for a crop in the early stage of forming grain, that suggests there could be “substantial” production losses, INTL FCStone chief commodity economist Arlan Suderman said in a note. Heavy rain also fell over the southern portion of the Midwest over the weekend, and floodwaters need to recede this week to assess how much of the crop needs to be replanted, he said."

Making matters worse, about 25 percent of the Kansas crop was forming grain as of April 23, up from 20 percent a year earlier and above the 17 percent average in the previous five years, U.S. Department of Agriculture data showed. About 23 percent of this year’s winter-wheat acreage was planted in Kansas in the autumn, making an accurate assessment of losses days - or weeks - away, Meyer at Pira Energy said. The warm weather in February and March pushed the crop further along, leaving it vulnerable to damage from the heavy snow

It was a pretty nasty storm,” Streit of Commodity Weather Group said. “It is probably the most snow I can remember for the region” for this time of year, he said.

Further anecdotal estimates suggest that today's price spike may indeed be just the beginning:

In 2016, Kansas, Colorado, Oklahoma and Nebraska combined to produce almost half of the U.S. winter wheat crop. Right now, the snow has crushed many plants in the western third of Kansas, Aaron Harries, a vice president of research at Kansas Wheat in Manhattan, said in a telephone interview. The crop in the Plains, where hard red winter wheat is primarily grown, has been more advanced than normal following a mild winter.
The wheat was a little bit taller than it might normally be,” Harries said. “In a lot of places, the stems actually snapped or kinked over. If that’s the case, it can’t get nutrients to the head anymore, and it’s done.”
The snowstorm followed a freeze late last week that also threatened the state’s crop. According to a map from Kansas State University Extension, wheat in more than 20 counties throughout central Kansas was at “high risk” of freeze injury on April 27.

It has yet to be seen if this weekend's freak winter storm is the catalyst that unleashes Muir's long-running bet on a surge in wheat prices, a move which would have a dramatic impact on the Fed's stated intentions to tighten monetary conditions as a surge in food prices would lead to a lot of unhappy Americans. However, as of Monday's close, it is reasonable to say that what until just 48 hours ago may have been the "last remaining cheap asset" just got substantially more expensive.

Here is a recent discussion with Guy McPherson

Even Paul Beckwith, in the past, has predicted simultaeous crop failures. Although he sees it as moving hmanity to action it seems that it is already too late to turn things around, especially given the 'business-as-usual' attitudes

No comments:

Post a Comment