DTN Ag Headlines

OMAHA (DTN) -- The majority of fertilizers continue to be less expensive for the third week of June 2022, according to fertilizer prices tracked by DTN. This trend has been in place for a month now.

Seven of the eight major fertilizers prices were lower compared to last month, including one down considerably. DTN designates a significant move as anything 5% or more.

Urea was 9% lower compared to last month. The nitrogen fertilizer had an average price of $902/ton, an $87/ton decline.

DAP had an average price of $1,040/ton, MAP $1,058/ton, 10-34-0 $905/ton, anhydrous $1,497/ton, UAN28 $616/ton and UAN28 $716/ton.

One fertilizer was slightly more expensive compared to last month but nothing substantial. Potash had an average price of $885/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.98/lb.N, anhydrous $0.91/lb.N, UAN28 $1.10/lb.N and UAN32 $1.12/lb.N.

With lower fertilizer prices in the third week of June, it's almost a return to the past. This was a normal trend we would see after the spring planting and fertilizer application seasons.

With less fertilizer demand, nutrient prices would normally drop some in June/July and then firm somewhat once retailers refilled their inventories over the summer. Fertilizer prices would firm again in the fall as demand would increase as application would happen.

This trend has seen some adjustment over the years with the emergence of side dressing operations becoming more popular. Fertilizer prices would drop in early June, but then this seasonal drop started happening later, into late June and into July as there continued to be fertilizer demand in early June.

Of course, we didn't see this downtrend at all in 2021. Retail fertilizer prices were continuously moving higher during last year.

It will be interesting to see what happens in the coming weeks and months. I'm not sure the return of this trend means fertilizer prices are destined to be lower, but it is kind of nice to be able to see something "normal" with fertilizer market trends, especially after last year.

Most fertilizers continue to be considerably higher in price than one year earlier.

10-34-0 is 45% more expensive, MAP is 47% higher, DAP is 55% more expensive, urea is 67% higher, UAN28 is 68% more expensive, UAN32 is 70% higher, potash is 89% more expensive and anhydrous is 107% higher compared to last year.

DTN gathers fertilizer price bids from agriculture retailers each week to compile the DTN Fertilizer Index. DTN first began reporting data in November 2008.

In addition to national averages, MyDTN subscribers can access the full DTN Fertilizer Index, which includes state averages, here: https://www.mydtn.com/….

Those farmers who graze livestock also saw a large increase in their fertilizer budgets for nutrients for grasslands this growing season. You can read it here: https://www.dtnpf.com/….

DRY
Date Range DAP MAP POTASH UREA
Jun 21-25 2021 670 720 469 541
Jul 19-23 2021 695 750 543 553
Aug 16-20 2021 695 755 564 556
Sep 13-17 2021 702 776 598 572
Oct 11-15 2021 798 860 710 719
Nov 8-12 2021 821 906 762 832
Dec 6-10 2021 840 919 778 887
Jan 3-7 2022 863 931 807 913
Jan 31-Feb 4 2022 877 933 813 905
Feb 28-Mar 4 2022 879 937 815 887
Mar 28-Apr 1 2022 1033 1045 868 1022
Apr 25-29 2022 1049 1082 881 1004
May 23-27 2022 1056 1082 879 989
Jun 20-Jun 24 2022 1040 1058 885 902
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Jun 21-25 2021 625 724 366 420
Jul 19-23 2021 632 736 365 419
Aug 16-20 2021 631 743 369 420
Sep 13-17 2021 632 762 381 428
Oct 11-15 2021 654 873 442 488
Nov 8-12 2021 719 1162 566 614
Dec 6-10 2021 756 1372 577 661
Jan 3-7 2022 795 1430 584 679
Jan 31-Feb 4 2022 826 1487 600 699
Feb 28-Mar 4 2022 837 1487 603 703
Mar 28-Apr 1 2022 896 1526 637 711
Apr 25-29 2022 906 1534 631 730
May 23-27 2022 906 1531 634 731
Jun 20-Jun 24 2022 905 1497 616 716

Russ Quinn can be reached at Russ.Quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

USDA's Acreage report and Quarterly Grain Stocks for June 1 will be released Thursday, June 30, at 11 a.m. CDT. Popular attention is usually focused on the planting estimates, but don't overlook USDA's estimates of corn and soybean stocks heading into the final stretch of 2021-22.

ACREAGE

At this year's Annual USDA Ag Outlook Forum in late February, USDA estimated 92.0 million acres of corn plantings, 88.0 million acres of soybeans and 48.0 million acres of wheat. A month later, USDA's March survey of planting intentions pegged corn acres at 89.5 million, soybeans at a record-high 91.0 million and all wheat plantings at 47.4 million.

With all due respect, the above estimates do not belong in the same category of reliability USDA's June 30 Acreage report will offer, meaning that a surprise is possible for those of us swayed by the earlier, less meaningful estimate attempts.

USDA's record of the past 20 years shows the June 30 corn planting estimate has a 90% confidence interval of plus or minus 1.8% or 1.6 million acres in today's terms. The 90% confidence interval for soybean acres is higher, at plus or minus 2.7 million acres, and both estimates tend to be higher on June 30 than the final estimates turn out to be.

We can also say from the dreadful experience of 2019 that abnormal weather is typically the biggest threat to the reliability of USDA's June planting estimate. Fortunately, this year's weather-related planting problems were largely limited to eastern North Dakota and northwestern Minnesota, so I expect Thursday's estimates to be fairly accurate.

Understanding the inherent imperfections, Dow Jones' survey of analysts expects USDA NASS to estimate planted acres at 89.69 million for corn, 90.43 million for soybeans and 46.89 million for all wheat.

A further breakdown of wheat planting estimates shows expectations for 34.23 million acres of winter wheat, 10.81 million acres of other spring wheat and 1.84 million acres of durum. If spring wheat acres are less than 11.02 million, it will be the smallest since 10.14 million were planted in 1972, the year President Richard Nixon was elected to a second term.

With this year's extremely high fertilizer prices, a new booming industry of renewable diesel plants and early planting delays in the Northern Plains, it does seem likely that soybean acres will exceed corn acres for the first time since 1983, the year of the PIK program. The corn/soybean total is apt to stay below last year's record high of 180.6 million.

JUNE 1 GRAIN STOCKS

As Rodney Dangerfield would say, June 1 Grain Stocks get no respect, compared to USDA's popular Acreage estimates, but the lack of respect is not deserved. USDA's Grain Stocks reports have their own flaws, but they are the most important reporting effort U.S. grain markets have and are the primary check on the numbers in USDA's WASDE reports.

For corn and soybeans, there is a good chance June 1 stocks may come in lower than expected this year and earn their keep in terms of keeping prices more honest than they otherwise would be. Dow Jones' survey expects USDA to find 4.330 billion bushels (bb) of corn stocks on hand as of June 1, up from 4.111 bb a year ago.

So far in 2021-22, corn stocks have been running above year-ago levels, last seen 254 million bushels (mb) higher in the March 1 report. Since then, however, basis has remained strong, and the July-September corn spread has widened to nearly 90 cents with July above the September contract. Such a wide premium suggests strong commercial demand for tight supplies of old-crop corn. Don't be surprised if June 1 corn stocks come in below 4.300 bb.

Dow Jones' survey expects USDA to find 959 mb of soybean stocks on hand as of June 1, but again, I expect a lower number. USDA's ending stocks estimate for U.S. soybeans in 2021-22 is 205 mb, 52 mb less than the previous year's 257 mb.

USDA's March 1 report showed U.S. soybean stocks 369 mb above the previous year's total at 1.931 bb. At that time, the July-August soybean spread showed a 43-cent premium, July over August. As of Tuesday's close, July soybeans were priced $1.07 1/4 above the August contract, an extremely bullish indication of old-crop supplies that the market has not seen since the days following the drought of 2012.

For wheat, Dow Jones' estimate of 655 mb matches USDA's ending stocks estimate for 2021-22 in the June WASDE report. U.S. wheat exports have been notoriously slow in 2021-22, and final stocks may end up a little higher than expected, but any surprise is apt to be small.

**

At 12:30 p.m. CDT Thursday, DTN will host a post-report webinar, and you are welcome to join. We'll go over USDA's new estimates, what they mean for prices and answer any questions you might have. Join us live on Thursday or use the link that is later provided to watch the webinar at your convenience. Register now at: https://ag.dtn.com/….

QUARTERLY STOCKS (million bushels)
6/1/22 Avg High Low 6/1/21 3/1/22
Corn 4,330 4,474 4,095 4,111 7,850
Soybeans 959 1,100 740 769 1,931
Wheat 655 670 635 845 1,025
ACREAGE (million acres) USDA USDA
6/30/22 Average High Low 3/30/22 2021
Corn 89.69 90.50 88.40 89.49 93.36
Soybeans 90.43 92.40 89.20 90.96 87.20
All Wheat 46.89 47.50 46.30 47.35 46.70
Winter 34.23 34.40 34.20 34.24 33.65
Spring 10.81 11.50 10.40 11.20 11.42
Durum 1.84 2.00 1.70 1.92 1.64

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

Rail and port workers in the U.S. and Canada are in the midst of contract negotiations, and a failure to come to an agreement could be a disaster for West Coast ports and railroads. Currently, there are three major transportation-related groups in contract talks with one already declaring a strike.

On June 18, after rejecting the latest contract offer from Canadian National (CN), the International Brotherhood of Electrical Workers (IBEW) went on strike. The IBEW workers involved consist of approximately 750 signal and communication employees in Canada and walked off the job to fight for better wages and benefits.

CN announced in a news release on June 20 that normal rail operations would continue safely, as it had implemented its operational contingency plan. The plan allows the company to maintain a normal level of safe rail operations across Canada and serve its customers for as long as required if the strike continues.

CN Executive Vice President and Chief Operating Officer Rob Reilly sent a letter to all employees represented by the Union to inform them of CN's latest offer. "We have been in negotiations with the Union since October 2021," Reilly said. "CN has approached this round of bargaining with the objective of improving wages, benefits and work rules, and ensuring the safety of our employees. We have met or exceeded every one of the Union's demands in an effort to reach an agreement prior to the strike deadline. Unfortunately, we did not reach an agreement and the Union has exercised its legal right to strike." Here is a link to that letter: https://www.cn.ca/….

CN said that it is disappointed with the current situation but remains committed to finding a resolution, and it continues to encourage the IBEW to end its strike through an agreement or through binding arbitration.

US RAILROAD WORKERS REJECT ARBITRATION AMID POOR RAIL SERVICE

U.S. rail worker unions recently said "no" to railroad contract proposals after three weeks of mediation following more than two years of "fruitless negotiations" with Class 1 railroads. Enter the National Mediation Board (NMB), who put forth a proffer of arbitration to move the dispute to the final steps of the Railway Labor Act.

As of June 16, the first deadline passed for unions to accept the proffer, and then, on June 18, the parties entered into a 30-day "cooling off" period where the status quo is maintained. This is the first of three 30-day windows aimed at finding an agreement.

At the end of that 90-day stretch, if no agreement is reached between the parties, congressional intervention could be all that prevents a national shutdown.

On June 24, the Brotherhood of Locomotive Engineers and Trainmen (BLET) said it began mailing ballots to more than 23,000 members seeking authorization for the Union's leadership to call a strike should one become necessary to settle the current national contract dispute with the nation's largest rail carriers. This is a mandatory step required by the Brotherhood's internal law as the Union approaches the point where self-help becomes a legal option to both labor and management, noted BLET in a news release.

"Let me emphasize that authorization does not mean a strike will occur, nor does it mean that all railroads may be struck," BLET National President Dennis R. Pierce said. "Now is the time to deliver a unified message to the carriers that their contract proposals are unacceptable to BLET's membership and that we stand united."

Amid all this, there are still ongoing rail logistic issues at many of the Class 1 railroads. On June 13, Surface Transportation Board Chairman Martin Oberman said on the STB website, "We are in the middle of a rail service crisis and the Board continues to receive reports about persistent, acute, and dramatic problems in rail transportation, disrupting critical supply chains and shutting down companies."

In response to the extensive problems described at the April 26 and 27 hearing in Urgent Issues in Freight Rail Service, the STB on May 6 issued an order requiring the four largest U.S. railroads, BNSF, CSX, NSR and UP, to file service recovery plans that would specifically describe their key remedial initiatives and promote a clearer vantage point into operating conditions on the rail network.

"The freight rail industry is currently struggling to provide adequate rail service, yet the service recovery plans we received are woefully deficient and do not comport with the spirit or the letter of the Board's order," said Oberman. "It is particularly disturbing that the railroads failed to comply with the order requiring them to file adequate service recovery plans. I had expected a better response from the carriers to the Board's previous order, and now with more explicit instructions, which should not have been needed, there will be no excuse for continued lack of compliance."

It was at the hearings that all rail unions testified about the poor worker morale, particularly after some railroads eliminated a third of the workforce in less than a decade. One rail worker said that railroads are trying to do more with less, and it is having a negative effect on all of them. It's no wonder that the current contact negations have failed.

WEST COAST LONGSHORE WORKERS STILL IN NEGOTIATIONS WITH PMA

The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) released a joint statement regarding labor negotiations that started May 10. "Talks are scheduled to continue on a daily basis until an agreement is reached," the statement said. Both sides also said they expect cargo to keep moving throughout the process.

At midnight on June 30, the contract expires for 20,000 West Coast dockworkers at 29 U.S. ports. Both parties have said they expect talks to extend beyond the July 1 expiration of the existing deal. Even still, the White House is on standby if negotiations should worsen.

It is important to note that when an existing contract expires, the "no strike" clause becomes null and void and the possibility of disruption increases.

The Journal of Commerce said in a June 14 article about the current talks, "In past negotiations dating back to 2002, an agreement was never reached by the July 1 expiration date. The 2002 negotiations were marked by ILWU work slowdowns and a PMA lockout of dockworkers, which resulted in costly disruptions. That was not the case in the 2008 negotiations, which experienced virtually no slowdowns."

So, the question remains: How will all of these current contract negotiations turn out? This time around could get interesting because, given the years of COVID-19 struggles and current inflation, among many other issues, workers certainly have the upper hand.

STB April 26 and 27 Rail Service Hearings: https://www.dtnpf.com/…

Years of Contract Negotiations Between Railroads and Workers Stall: https://www.dtnpf.com/…

West Coast Longshore Negotiations Have Begun on Soon-to-Expire Contract: https://www.dtnpf.com/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

Last week's loss of thousands of fat cattle in Kansas feedlots is being described as a "heart-wrenching natural disaster" by eyewitness Nels Lindberg.

Lindberg is a veterinarian who works with multiple feedlots in the Ulysses area. He spoke with DTN to share what he saw and to describe steps feeders took leading up to the deaths. He is a partner in Production Animal Consultation (PAC), an independent group helping to oversee 1.4 million head of cattle on feed in the U.S.

Lindberg and another partner in the PAC group were called on to help at multiple Kansas feed yards during the emergency. DTN reported on the event June 14, alerting the industry to massive losses in what at that time was thought to be a heat-stress event. That story can be found here: https://www.dtnpf.com/….

Lindberg, who verified the cattle deaths were due to a heat-stress emergency, told DTN, "These feed yards prepare for adverse events every day. This particular event happened abruptly. This was not a case where feedlot managers were sitting around doing nothing. We had a forecast that told us this was coming. We had maps that predicted a heat stress event. We followed mitigation strategies, including more bedding, more water tanks and rations adjustments."

The problem wasn't a lack of preparation, the veterinarian emphasized. "The fact is this was a natural disaster," he said. "Things were so extreme that regardless of the plans we put into place, regardless of doing all we could do to mitigate conditions, we couldn't keep up. It's like asking why didn't they do something to keep New Orleans from flooding. Sometimes there's just nothing you can do."

Lindberg went on to say that 99% of the time, the steps they took in the days leading up to the cattle deaths would have helped. This was a case, however, that fell into the 1%, where what normally works didn't.

He added, unequivocally, "There was no conspiracy or foul play at work here. There was no disease, no virus, no poison. This was simply a natural disaster."

HUMID, HOT WEATHER AND FAT CATTLE

The veterinarian told DTN that when a heat stress event hits, those animals most greatly affected are the ones toward the end of the finishing period. For three days, temperatures were in the triple digits, with nighttime humidity and little to no wind.

"These cattle were big, fat, ready to go to harvest, and for the most part, they were black-hided," he said. He estimated weights for animals at that phase typically between 1,250 and 1,500 pounds each.

DTN Ag Meteorologist John Baranick looked at the data tied to those three days of heat around the Ulysses area where the cattle died. He noted that dew points started to break into the higher 60s and hold there through the night, beginning Saturday.

A dew point is the temperature air has to be cooled to to reach a relative humidity of 100%. In general, dew points in the 50s during the summer months are comfortable. Once dew points hit 60 and above, they are considered to be extremely muggy and humid. The air temperature can never go below the dew point.

"Normally, we don't see dew points that high without it being windy as well," Baranick added. "Usually, this part of the country sees the heat, but the lower dew points allow cattle to cool overnight. When this event took place, the higher dew points did not allow for that cooling. Also, we weren't seeing the winds we typically would under the conditions we had."

By Monday, reports were beginning to surface of massive losses in the area's feedlots. Lindberg said that for that three-day period, "the weather literally devastated our industry."

"We care for these cattle every day. We do all within our power to keep them healthy. Sometimes an extreme weather event comes along, and it hurts our ability to care for them, but no one cares more about the health and well-being of these animals than we do."

Asked if he had a final tally of the losses, Lindberg said he did not. He does not believe the number was greater than 6,000 or 7,000 head but added that it was impossible to know because multiple feedlots were involved, and his company did not consult on all of them.

HANDLING THE AFTERMATH

When a massive mortality event like this takes place in the feed yard industry, disposal becomes a critical issue.

Lindberg explained that rendering companies are paid to come to feed yards every day and pick up dead animals. That company renders them into useful products. When there is an extreme event, and death losses exceed what is normal, this is still the protocol.

"The rendering companies add more trucks and staff to handle the extra animals," said Lindberg. "In addition, in Kansas, we have the KDHE (Kansas Department of Health and Environment), which has emergency plans and protocols in place to help with emergency burial operations."

BIG LOSS A SMALL PERCENTAGE

DTN Livestock Analyst ShayLe Stewart said that putting the heat-stress losses at 10,000 head as an estimate, it's important to soberly consider how that might affect the U.S. food supply.

"We process 600,000 head of cattle in this country in a week. If we lost 10,000 head in this heat-stress event, as awful as that is, it was 1.6% of the total supply over one week. I'm not belittling the loss of life, because we never want to see animals suffer. But from a production standpoint, this is not a big drop in our overall fat-cattle supply, and it's not going to affect our food supply."

PAYING FOR THE LOSS

How will feedlot operations pay for losses like these?

Lee Gleason, vice president of sales for ProValue Insurance, is a long-time agribusiness and farm insurance specialist. He is based in the Hutchinson, Kansas, area, and told DTN his company writes several feed yards in the state.

"From a private insurance perspective, there is no product out there to protect from this," he said of the heat-stress deaths. "Livestock mortality is tough. I've done some checking around other markets, and to my knowledge, no one will touch this."

Gleason said that in this most recent loss event, feeders were already dealing with all-time high prices for gains. He said at the phase the animals were in, the majority probably died with 3 to 4 months of feed bills already invested in them.

"If we estimate each animal at a value of roughly $1,600, we are looking at a really big number with these losses," he said.

As for coverage outside of private commercial carriers, USDA's Livestock Indemnification Program (LIP) may help with some of the losses, depending on eligibility of the individual or entity owning the cattle, and whether or not the losses occurred in an extreme heat scenario, as established by the rules of the LIP.

Mostly, this means that if the animals that died in the feed yards were on retained ownership, those owners may be eligible for some compensation if all the criteria for the loss are met. Feed yards themselves, in general, are likely not going to be eligible. That explanation was verified by a public source, who works to help administer the LIP.

The LIP rules state it only compensates eligible livestock owners for eligible death losses in excess of what it considers "normal mortality" as a direct result of an eligible loss condition.

In the case of heat-related losses, the temperature humidity index (THI) is used to gauge eligibility. If losses are determined eligible, they are covered at no more than 75% of average fair market value. The LIP program is administered through the Farm Service Agency. A notice of loss must be filed within 30 days.

Victoria Myers can be reached at vicki.myers@dtn.com

Follow her on Twitter @myersPF

OMAHA (DTN) -- Evidence appears to back the fertilizer industry's claims that increased production costs and supply chain issues were responsible for higher fertilizer in 2021 and 2022, but more data is needed to support claims by some groups that fertilizer companies have engaged in price gouging, according to a new Iowa State University (ISU) report.

The recently released report (https://www.card.iastate.edu/…), which was requested by Iowa Attorney General Tom Miller back in February 2022, sheds more light on the recent fertilizer price spike and what is going on within the industry currently.

DTN wrote about Miller's look at the fertilizer industry and the ISU study earlier in February 2022 (https://www.dtnpf.com/…).

The report by ISU's Center for Agricultural and Rural Development said the expectation is fertilizer prices could decline in the second half of 2022. However, there are several factors that could prevent fertilizer prices from stabilizing both in the short and longer term, the report said.

RISING COST, SUPPLY ISSUES KEY

The report said the hypothesis that increased production costs and supply chain issues were the main cause of higher fertilizer prices in 2021 and 2022 appears to be true. These issues have pushed fertilizer prices to historically high levels over the past two years.

Because of these issues, the report also states, there is evidence the fertilizer market has seen some structural changes. Statistical analyses of these changes point to underlying energy costs and, to a lesser extent, increased farm demand having more influence on fertilizer prices.

However, ISU was unable to determine whether the claim by some food and agriculture groups that fertilizer companies have engaged in price gouging is true.

"The argument that fertilizer firms may be taking advantage of inflation to raise prices raises more questions than answers at this point," the report said. "Nevertheless, they are good questions for which we need more data."

The report also said comparisons of the fertilizer industry to other food and agricultural industries shows similarities and differences in terms of stock prices, net income, etc.

In some cases, the fertilizer industry looks different than other industries, while in other cases, the industry has performed better than many food and agricultural industries, the report said. The lack of good data on these factors that have affected the fertilizer marketing chain and costs for fertilizer during the COVID-19 pandemic hampers using statistical methods to discern market power, according to the report.

Another point the report makes is Iowa farmers do have other options when purchasing nutrients.

The report said manure, for example, can be used as a crop nutrient. However, manure's market development is not to the point that this option can be used as a relief from higher fertilizer prices.

IOWA AG: STILL WATCHING INDUSTRY

In a news release (https://www.iowaattorneygeneral.gov/…), Iowa Attorney General Miller thanked ISU for studying high fertilizer prices and creating the report and promised his office would continue monitoring the situation.

"This thorough report raises many good questions, which we will continue to explore," Miller said. "Although there are a lot of unknowns, we remain concerned that increases in crop returns for farmers tend to coincide with even higher increases in fertilizer expenditures."

In February, Miller announced his office would take a closer look at the large increases in fertilizer prices after the Iowa Corn Growers Association and other ag groups approached him with their concerns. At that point, Miller began to work with USDA Secretary and Iowa native Tom Vilsack and others to collect information.

The Iowa Attorney General also requested information from the five major fertilizer companies: Mosaic, Nutrien, CF Industries, Koch Industries and OCI N.V. (owner of Iowa Fertilizer Co.).

DTN tracks retail fertilizer prices, and current prices are dramatically higher than they were a year ago. Prices range from 46% to 111% higher compared to last year.

One positive aspect is that in the past few weeks, prices for some retail fertilizers have moved lower compared to last month. Prices have moved lower for three consecutive weeks, although no fertilizer has seen a significant price decline, which DTN states as 5% or more (https://www.dtnpf.com/…).

Russ Quinn can be reached at Russ.Quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

If your field is beginning to look more like a pineapple crop than a cornfield, you're witnessing some clever corn biology at work.

That means corn plants are starting to implement their emergency water-savings playbook, said Matt Montgomery, agronomist with Pioneer.

High temperatures nearing or exceeding 100 degrees Fahrenheit with high humidity since June 9 have increased moisture requirements for developing crops, noted DTN Ag Meteorologist John Baranick. Soil moisture has been falling dramatically with rainfall becoming sparse with the heat, as well.

Montgomery likens corn plants to a water hose. Water is constantly flowing through the plant. It enters from the roots, flows through the vascular system and ultimately exits through small holes in the corn leaf, known as stomates.

When the roots aren't bringing in enough water, or too much is lost to the searing midday sun, that flow weakens.

"When you trim the flow of water, a hose gets floppy," Montgomery explained. "In the same way, a corn plant wilts when the water pressure within it drops."

But unlike your average garden hose, a corn plant can do something about its low water flow -- a souvenir from its early evolutionary days as a tropical Mexican plant, Montgomery said.

Within the leaf tissue, large cells inflate with water like tiny bladders. When they are full, the leaf is flat and healthy looking. But when water is drawn out of the plant leaf, the little bladders deflate and contract, causing the leaf to roll inward.

The result is twofold. Immediately, less surface area of the plant is exposed to solar radiation, which reduces how hot the plant gets. At the same time, the corn plant has constructed a more pleasant environment for its leaves.

"As the leaves curl, a region of high humidity develops," Montgomery explained. "The plant has produced an artificial zone inside the leaf tube of higher humidity where water is not leaving the plant as quickly."

As the plant's moisture loss slows, its internal water pressure rises again.

Severe and prolonged heat are obviously a major cause of pineapple leaves, but so are dry, low-humidity days where the plant rolls its leaves to restrict evaporation.

So, clearly, moisture stress drives this reaction, but why do some corn leaves roll when just across the road the neighbor's corn looks perky and happy?

The answer is often in the roots, Montgomery said.

Sometimes, when moisture is abundant early in the season, corn roots get a little lazy. With plenty of water in the top few inches, they don't spread as deeply into the soil profile as they can. Then, when a dry spell hits, these shallow root systems can find themselves stranded.

"Anything that restricts root growth can cause the same symptoms," Montgomery added.

Field differences -- such as compacted soil -- and hybrid differences can also contribute to leaf rolling, Montgomery added. "In some plants, the bladders in the leaf will shrink a little earlier than another hybrid."

While leaf rolling is a good mechanism for slowing water loss, it isn't ideal or sustainable for the corn plant.

"Seeing corn leaves rolling isn't something to automatically worry about," Montgomery said. "The issue is how long it's exposed to that moisture stress." After multiple days of rolling up so tightly that the leaves resemble pineapple plants or sticks, yield loss can begin, he said.

Corn plants aren't alone in their efforts to conserve water.

When soybean plants start to feel moisture stress, tiny cells at the base of their leaves step up to protect the plant. Montgomery compares them to a person's wrists. "Like a wrist with a hand, they will twist the leaf around to show its silvery underside to reflect more solar radiation."

The result are fields that take on a grey or silvery cast, he said.

There are no products beyond rainfall (or irrigation) to fix these moisture-stressed plants -- and don't believe anyone who tries to tell you otherwise, Montgomery added.

"That's a bill of goods -- there's no magic sauce to put on the crop to fix drought," he said. "You need moisture for drought stress -- that's what fixes it."

For more information on corn rolling, see this publication from Purdue University's Bob Nielsen: https://www.agry.purdue.edu/….

Editor's Note: This story was originally published in June 2016, and it is being reprinted for the 2021 season. See the original here: https://www.dtnpf.com/….

OMAHA (DTN) -- Planting came late this year for Wahpeton, North Dakota, farmer Chris Johnson, but he estimates he ended up unable to get seed into the ground on only about 4% of his land.

Johnson was in a sprayer Tuesday side-dressing some cornfields. His crop on southeastern North Dakota and western Minnesota acres also got a rain shower Monday night, ranging from 1/4- to 3/4-quarter inches, after a weekend of 100 F heat and high winds.

"It was a very nice shower for the crop to take in," Johnson said.

Johnson finished planting soybeans on June 10, the final planting date for soybeans in Minnesota and eastern parts of North Dakota. He said about 4% of his total acres ended up unable to plant, which includes about 100 acres in Wilkin County, Minnesota, that were still underwater in early June. "It didn't get any better, let's just say that."

Johnson added, "Four percent is not too terribly bad, but it's still 4% with the corn and soybean market, and wheat market, as good as it is now."

As market analysts ramp up forecasts for the June 30 acreage report, planted acreage in the Northern Plains may come in stronger than anticipated even a month ago. The acreage report doesn't spell out exactly how many acres will be deemed prevented planting but will detail how closely planted acres align with the last couple of years.

After a tough planting season delayed by a late snowstorm, crop acreage in North Dakota and surrounding states is starting to look better than anticipated last month when analysts were forecasting high amounts of prevented-planting acres in the Northern Plains.

As of last week, North Dakota had gotten 90% of last year's corn acreage planted, or just under 3.4 million acres. Emergence, though, is lagging. Tuesday's Crop Progress report showed as of June 19, only about 68% of North Dakota's corn crop had emerged.

Soybean acreage in North Dakota and Minnesota is coming in closer to normal, according to the Crop Progress report. North Dakota had about 92% of last year's acreage planted, which breaks down to about 6.2 million acres planted.

While Johnson will end up with fewer prevented planting acres than 2019, he said this year caused more stress because of the prolonged uncertainty over whether he would be able to get into the fields as they slowly dried.

"It was definitely more stressful than '19 because in '19, there was no decision. It was wet," Johnson said. "This year, we struggled."

With his corn behind schedule, Johnson said his crop is about "boot high" though he was noting a neighbor's field was just about two to three inches tall. Some of Johnson's soybeans are just coming out of the ground.

"The wheat is as tall as it should have been six weeks ago. So we'll see how it turns out. That could be interesting in itself because wheat doesn't like hot weather at the wrong time."

LATE WINDOW OPENED

Liz Stahl, a University of Minnesota Extension educator in crops out of Worthington, in the southwest part of the state, said there was a lot of concern in her area about possibly higher levels of prevented planting.

"Things weren't looking good for a while, but fortunately most people had windows they were able to get things planted -- some very long-hour days, although the dates were later than usual," Stahl said.

There were planting windows in Minnesota to get corn in before it got too far into June, but there may be higher levels of prevented-planting acres in west-central Minnesota and potentially in northwest Minnesota as well.

While planting started late, Stahl said she doesn't think it will have much of an impact on yield potential because the year started out cooler. Stahl added, "For all of the concern about PP earlier this year, where I live we actually could use some moisture again -- we're in an abnormally dry spot in Minnesota. The heat has turned on too, so hopefully the rain won't shut off like it did last year at this time."

TILES AND HOES

"Fields that had drain tile underneath them, those we were able to plant in a halfway decent timely manner," Johnson said. "But those fields where we didn't have tiling, we struggled."

A lot of farmers in Johnson's area also pulled out their rotary hoes because of crust that formed on the fields that made it difficult for both corn and wheat to break through the surface, Johnson said.

"We had to do some rotary hoe work," he said. "In my local area, there were at least a dozen farmers that were rotary hoeing. So not only did we struggle to get it planted, we struggled to get it up."

In central South Dakota, farmer and DTN Contributing Analyst Tregg Cronin said there will be zero prevented planting in his area. All of the intended acres were planted, although some acreage may have been shifted as the calendar got deeper into May. Cronin said there were more prevented-planting acres in parts of northeastern South Dakota. "I don't think the PP acres will be as bad as originally thought in May as the weather turned drier in June and there was simply too much incentive to plant something/anything to leave them fallow."

LATE PLANTING IN NORTHERN STATES

After the final planting date, farmers have 25 days of insured late planting in which the coverage level drops 1% each day.

For corn, the late planting period ended June 19 for most of North and South Dakota, as well as northern parts of Minnesota. For most of Minnesota, the late planting period for corn ends June 25.

For soybeans, the late planting period ends July 5 in Minnesota, eastern North and South Dakota, and most of the northern counties in Wisconsin. In Iowa and the southern one-third of Wisconsin, the late planting period stretches until July 10.

For farmers who could not get a cash crop in the ground, the Risk Management Agency last year adjusted the rules for cover crops to allow them to be hayed, grazed or cut for silage at any time. Farmers can make those cover crop moves without affecting their prevented-planting indemnity payment.

"The federal rules are allowing you to plant a cover crop and harvest it with hay silage or grazing without a penalty, so there are some opportunities for people who have livestock," Johnson said.

SUNFLOWER PLANTING

"I have seen more sunflowers in my area than I've seen in a long time," Johnson said. "I just talked to one of my friends and they haven't planted sunflowers since 1996."

For farmers who applied fall nitrogen but could not get corn planted in a timely fashion, Johnson said sunflowers can be planted later than corn and it has a deep tap root that can get at that nitrogen.

"For the people that had fall fertilizer on, that's what they utilize because we feel it was too late to plant corn," he said, adding North Dakota farmers don't have access to the shorter season corn varieties. "We can plant them (sunflower) later and they respond to the fertilizer."

Cronin also noted seeing more sunflower acres than normal in his area, but he attributed that to last year's drought as well. There was a tremendous amount of carryover nitrogen as yield goals weren't achieved in 2021. If farmers had elected to plant soybeans instead of a crop such as corn or sunflowers, then that "free" nitrogen would have been wasted on soybeans.

"We definitely skewed our broadleaf acres toward sunflowers for this reason," Cronin said. "Usually, we are around 50/50 on soybeans/sunflowers for our intended broadleaf acres and this year we are 70/30."

The war in Ukraine also has driven up prices for sunflower because Ukraine had been responsible for roughly half of global exports of sunflower oil. New-crop contracts are at record highs at 35 cents a pound plus oil premiums.

"Sunflower prices are record high on both ends of the curve," Cronin noted. " Old crop can be sold at 45 cents (per pound) plus oil into crush plants FOB farm. Bird food is probably a penny better than that without oil premium."

Cronin added, "With sunflowers preferring a little drier climate, the growing season so far has been very good with lots of potential on the table."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

WACO, Neb. (DTN) -- Under blue skies and rising heat and humidity June 16, Jeff Obermier, along with his son Brayden and their neighbors and friends, worked to get grain out of big bins now mostly topless and crumpled like tin cans. Next to trees with some of their tops sheared off and a shredded, twisted corn crop in the field, a line of semis waited to move the corn out.

"We're blessed with great neighbors and great friends that came over to help us out," Obermier said.

Like other farmers in east-central Nebraska, they were cleaning up after severe storms hit two days earlier, late on a Tuesday night, with hurricane-force winds in some areas. Some of Obermier's land got hit the hardest. His place is centered south about 6 miles from Utica and 6 miles from Waco, between I-80 and Highway 34 in east-central Nebraska.

"Tuesday evening, we got hail early and then straight-line winds later blew our crops down, hailed them out, tore roofs off six bins and flipped over a dozen irrigation systems for us," Obermier said.

Irrigation equipment may be tough to replace; several other places in the Midwest have reported pivots destroyed from the above-normal amount of severe wind reports this crop season. (https://www.dtnpf.com/…)

"The insurance adjusters have come out and took pictures," said Obermier. "But with inflationary costs in the prices of the equipment, we don't know if our insurance values were up to date enough to even come close to compensate us for all the expenses we're going to do," he explained.

"They're a little bit delayed, you know, transportation and labor issues that we're having ... we're probably looking at about two months before we can get irrigation systems back up.

"That pretty much means that we'll be dryland until the middle of August."

PLANNING TO REPLANT

However, even without irrigation, he's still thinking of replanting. After all, spring had started so well. He'd been on schedule with planting his crops. "We planted most of it in April, in the first week in May, and everything was looking really good until the hail came through."

On June 14, Obermier was optimistic about still getting a crop in. "We're gonna replant something out there, whether it be cover crops or another crop of corn or beans or whatever, depending upon what we can do for herbicides, because we don't want the ground to stay idle all summer long. It's not good for ground to be barren and weeds growing on it."

By June 21, Obermier said in a phone interview that he was well on his way to finishing replanting his fields. "By the end of the week, it will get replanted," he said, thankful for the neighbors who came to help him plant.

Looking at the higher costs of inputs he's facing this year, Obermier acknowledged it's always been a higher risk for what he and other farmers do.

"We're just very fortunate to have some crop insurance products to utilize that are going to help us out, hopefully. Time will tell that."

As for how his fields will do, he said they have good subsoil moisture; he thinks he got about 3 inches of rain from the storms that came through -- but he's not sure because hail broke all his rain gauges.

He added that the fields were really dry earlier this year, through corn planting, but then it started raining. "We've had really nice rains up 'til this point."

However, according to DTN Ag Meteorologist John Baranick, it may be a challenge without irrigation in Nebraska this summer. "Dryland farming is going to be a difficult endeavor in this part of the country over the summer. The combination of expected above-normal temperatures and below-normal precipitation does not bode well for this area, especially given that high temperatures and low precipitation are usual anyway.

"Drought is already encroaching on the area, with D1-D2 drought just north of the Platte River and around and west of Grand Island, according to the latest drought monitor," Baranick added.

"For reference, since 2000, Lincoln averages 2.76 inches of rain in July, 3.37 inches in August, and 3.03 inches in September. That comes in bursts of heavy rain from thunderstorms and those numbers are heavily skewed by such events," Baranick explained. "When those thunderstorms do not come as frequently, those numbers are very low for each month."

MULTIPLE STORMS

Multiple storms hit this area of east-central Nebraska on June 14. "We had plenty of warning, we knew it was coming, but it was the second storm in the middle of the night ... the first storm was a lot of hail and wind, the second storm was really high winds. We didn't get much rain ... some hail, but not a lot, out of the second storm, but mainly straight-line winds," he recalled.

Those fierce winds hit around 1 a.m. CDT. "We had been surveying damages in the fields, we got back home about 11:30, 12 o'clock and the power went out and we were in the basement and heard it but stayed down there, didn't come up until the next morning to see the damages, because you wouldn't be able to see much."

In the corner of one field, those high winds left behind two badly damaged bins that had been about a third full, with about 15,000 bushels of corn.

While he's thinking about replanting, what insurance will cover, and when even new irrigation equipment might arrive, for now Obermier raced to rescue the grain before the next storm clouds began to tower above the horizon.

"We salvaged all of it. Not much rain came after the roofs caved in, or blew off, and we've got two of them cleaned out, got one more to go," he said late Thursday afternoon as his helpers swept, shoveled and an auger churned. The grain was being hauled to a local elevator. "They said as long as you can keep bringing it, we'll keep dumping it. They made room for us."

His farmyard also got hit by the winds. "Our house is about a mile away from here, and we have three bins damaged there, and we have corn in one of them that we haven't been able to get out because the roof is inside of the bin." In his yard, the wind's strength is obvious: It lifted one bin roof and moved it 40-50 yards -- over the bin with its roof collapsed inside it -- and then crashed it down on top of two semis.

A few days after the storm, Obermier was able to hire a crane to remove the roof out of the bin so he could get the last of the corn out.

As the storm blew through last Tuesday night, Obermier estimated it about six or seven miles wide north/south and traveled 30 miles long east/west. He said the largest hail was the size of tennis balls, but he also got a lot of quarter-sized hail. Windows on vehicles were damaged, as well as on buildings.

HURRICANE-STRENGTH WINDS, BIG HAIL

Later, the National Weather Service confirmed the severity of the "intense winds, often accompanied by significant hail." NWS said it affected a large portion of Seward County, with peak winds near 115 miles per hour -- equivalent to the lower end of a Category 3 hurricane or an F2 tornado.

Through the area Thursday, the evidence remained: twisted irrigation systems flipped with wheels in the air; a collapsed cell phone tower; knocked down power poles; and a row of power company trucks on a backroad as crews worked to restore power. NWS added there were also some barns badly damaged or destroyed and windows and siding destroyed on homes.

And then there was the hail. Up to 3 inches wide or larger, along with the high winds, debarked trees and pounded healthy crops until only battered stalks remained. Some fields looked like they hadn't even been planted.

For Nebraska farmers, about halfway through the hail season, they knew other areas of the state had already seen severe hailstorms. Adding in June 14's storms, NOAA's National Storm Prediction center reported there have been 271 hail events already in the state, ranking it second in the country. There have been more hail events in the week since then.

This also wasn't the first hailstorm to hit Obermier's fields this year. A severe storm two weeks prior had taken a northwest to southeast angle and was about 80 miles long, he said. "And we had two or three farms get damaged from that one. And then this one took pretty much the rest of them ... I think we have two fields in northwestern York County, west and north of York that haven't gotten hailed yet."

While Obermier has had severe storms like this before, about every 10 years, this was different. "Usually, they're not as large of an area -- usually they're a small mile or two wide and a mile or two long. You know, these this year have just been large storms that go for a long ways, a lot of miles. You know, we had it in 2014 where we got hailed really bad, but it was only just a few sections of ground, where this year it's pretty much everything."

FARMERS HAD BEEN OPTIMISTIC

But up until early last week, farmers in these counties east of York, Nebraska, had been optimistic about their crops.

"You know, they were looking great," said James Mullally, who farms with his dad Pat west of Seward along Highway 34. "Honestly, the corn was really dark green and growing really fast. We were out. We got everything sprayed. We just had about 200 acres of beans left to spray. And then you're going through out there, and you're just kind of, me and dad were talking, 'gosh, everything's looking great.' Nope. Not anymore."

Mullally's family farm got hit hard.

"You know, you figure it's gonna happen eventually. It's never fun, usually you just hear about these kinds of things. But it's always your turn eventually, I guess."

Pointing across the highway from where he stood Thursday, Mullally described what happened two days earlier. "I was just at home, right over there ... we had that first one (storm), about 10:30, 11 (p.m.), good hail you know, some golf balls, it was pretty bad. You knew it was gonna be bad then," he said. "Then I went to bed and it woke me back up about 1:30. And that was when ... all the damage happened, that second wave."

He estimated at that point the winds reached 100 mph or more.

"I was kind of peeking out the window and lightning strikes and you could see the shadow of the big bin and you could tell it was smashed in, so I figured I better just go back to bed. I guess we'll find out in the morning how bad it is. It can't be good."

MULTIPLE BINS GONE

The next morning, he assessed the damage. Almost 5 inches of rain had also fallen. In the yard he lived, a small temporary lake of water almost flooded his long driveway and nearly reached his house. His house shingles got beat up. Seven irrigation pivots were down.

In another yard east of his house -- where his grandparents first homesteaded around 1970 -- four bins were gone from the concrete pads they were on. "They just got folded up, two blew into the shop," he said. "One blew over the top of my old International truck. Dented that all up and it ended up behind the shop there.

He considers himself lucky though: "It could easily have ended up on top of the shop or inside."

There is a strong pine scent in the yard. "A lot of my trees got shredded," Mullally said. Several of the tall pine trees carefully planted in a row by his grandparents when they first settled there decades ago were ripped clean out or snapped in half by the windstorm. For the last two days, almost nonstop, the Mullally family cut branches, picked them up, and stacked them in a big pile near the crumpled pieces of bins blown far from where they first stood.

He has already contacted his insurance agent -- who is pretty busy. "We got all our coverage that we need for our stuff. So, it's no big deal. Just wait for him to get out here and check it out. You know, start replanting, you gotta leave your strips."

Regarding seeing this happen to his crop when it's worth so much with higher prices, Mullally noted, "That's a real bummer. You know, it's a good year to have some bushels on the farm. So, you know, you get your insurance ... you get your coverage ... but it still would be nice to have those bushels to kind of market with."

For now, he's hoping he can get a crop into the ground, as it grows late to plant corn.

"Yeah, you know, I think beans are going to be fine ... We'll see what happens on the seed corn ground here ... then maybe put some corn in." However, he stressed it's tough to find seed right now, as other farmers in the state who had their crops "smashed up" by hail have also been calling around to buy corn and soybean seed -- and getting it shipped to their areas.

GENERATIONS OF FARMERS

Back south of Waco, as the grain auger rattled away moving grain into a semi, and as his cell phone occasionally rang, Obermier shared his appreciation for the help he received to help clean out the bins and clean up the damage. "We're very fortunate to have good neighbors and good friends to help."

When it came to the storm damage, "I'm the most affected, a lot of them have been affected by other storms and stuff, you know, because there's one went through west of here and so forth." He added it's been bad through this area.

"But we just keep doing what we're doing, we love doing what we do, so we're going to keep doing what we can."

He's not the only one who loves farming. "I got one son that just graduated from college and started farming. What a way to start." Obermier noted his son, 24-year-old Brayden, is a key partner who farms with him and has some of his own ground.

"I'm a fifth-generation farmer," Obermier said proudly. He's farming the land that was homesteaded by his great-great-grandfather, who originally had a mill on the land.

"I live a mile north, over here," he pointed, "we got bins down over there, too, on top of semis ... We're very fortunate, like I said, that is homesteaded ground over there where the house is, and over the years our neighbors rented us ground, and we have a large chunk of ground right here.

"And that's great when you get good crops and you get stuff done, but when you get one storm like this, it's terrible. Like, all these pivots that are upset? They're all ours. Our landlords and ours."

A HELPING HAND

Gary Suhr, who farms near Seward, Nebraska, was one of the friends who came out to help Obermier. "I live in town, in the town of Seward, and we were home and I was in bed and about 10 or 10:30 I heard the hail, so I got up and watched it hail there for about five or 10 minutes and then quit, went back to bed. Well, then another storm came through about between 1 and 2 (a.m.)," he said.

"I didn't see anything over ping-pong ball size, but it was the time, the length, the duration it lasted is what did the damage." The hail came down for five to 10 minutes," Suhr said.

"I have one farm that I'm pretty sure it's got to be replanted. It's corn. No pivots upset. Get some beans and some other corn fields. I have to wait and see how they turn out or what they look like," Suhr added.

The morning after the storm, Obermier called Suhr.

"We talked the next morning after it happened because he's got a farm over, right next to me. And he wants to know if his pivots were standing and so I checked and they were and so I said if you need any help, let me know," Suhr said.

Suhr continued, "Well, he called then this morning and said we're gonna haul corn, trying to get these bins that are missing the roofs out before it rains tonight." Suhr jumped in his truck and headed over, as did other neighbors.

Suhr echoed how farmers in this area were on time or earlier than usual getting their crops planted this spring.

"Now, it's going to be a long, wet harvest, if we can get back in," Suhr said.

Elaine Shein can be reached at elaine.shein@dtn.com

KANSAS CITY, Mo. (DTN) -- As President Joe Biden was signing the Ocean Shipping Reform Act into law Thursday, a group of executives from across the agricultural spectrum spoke about the various bottleneck and stress points in the supply chain that continue to plague the sector from the farm to the ocean carrier.

The various challenges of labor in rural America, transportation and reliance on foreign countries for key inputs were repeated themes as executives from Cargill Protein, John Deere, Dairy Farmers of America, MFA Inc., and the Mid-Kansas Coop each touched on the individual challenges in their businesses during a forum hosted by the Kansas City Agribusiness Council.

The executives touched on growing concerns about inflation, including the problems that have plagued West Coast ports. Biden, in signing the supping bill into law, stressed the legislation is needed to address inflation and ensure exporters such as agricultural shippers can get their products in containers and onto cargo ships.

Cargill exports about 20% of its beef products, so the port situation has been a challenge, especially because freezer space at ports becomes limited when shipping gets backed up, said Jarrod Gillig, president of Cargill Protein North America. While the Biden administration has tried since the beginning of the year to help boost agricultural shipping at California ports, Gillig said it remains slow.

"It's still definitely slower, and we believe there continues to be constrained movement through those ports, and that's what we're seeing whether that is due to container availability or the physical ports," Gillig said.

Michael Lichte, vice president of milk optimization and customer relations for Dairy Farmers of America, added the dairy industry is now reliant on nearly 20% of production going to export, so dairy farmers too are affected by slow service at the West Coast ports. Lichte also pointed to the pandemic shutdown in Shanghai, China, this spring that created a bottleneck for getting containers.

"We couldn't get our products exported overseas," Lichte said.

David Spears, executive vice president for Mid-Kansas Coop, highlighted the opposite problems of getting crop protection chemicals. Spears pointed out people don't appreciate the role China plays in those chemicals, adding roughly 80% of all the ingredients for crop chemicals come from China. Production was cut before last year's Olympics, and a lot of that production in China did not rebound, prompting China to freeze exports.

Spears also noted China, Russia and Ukraine combine for a high percentage of world's phosphate and potash exports. Belarus is part of that mix as well.

"You take that supply out of the market and prices are going to skyrocket," which they have, he said.

For cooperatives, Spears said the pricing of products has changed so much he cannot give costs to producers because they will change by delivery date.

"We can't give a price to the farmers until we have a price," Spears said. "That is really unprecedented for us as far as trying to get product delivered."

HIGH INPUTS STRESS DAIRIES

The 11,500 or so dairy farmers who are part of Dairy Farmers of America are seeing record milk prices but also record costs. Lichte noted there are farms in California right now that cannot get corn for their cattle.

"Costs are so high that we have got some farmers in the West that are on the verge of bankruptcy," Lichte said.

Lichte added in an interview with DTN that dairies are seeing inflation across the board, which also ties into labor challenges.

"While we're seeing record milk prices, we're seeing record costs of production, and it's just led to a major strain on the industry," he said.

For dairy processors, it also is difficult to find truck drivers to haul milk from farms to processing plants. Drivers are shifting over to jobs with the various delivery services.

LABOR

Each executive spotlighted the problems recruiting workers to rural America. Access to both affordable housing and day care were repeated themes, as well as the need to expand the H-2A guestworker program.

Gillig said Cargill is looking for different solutions to help recruit and keep employees in rural America directly tied to both day care and housing.

"I do believe we have got a constrained labor environment, but I believe employees are looking for something different," Gillig said.

Spears said his cooperative has increasingly turned to H-2A guest workers in recent years and now brings in more than 50 foreign workers for seasonal work. But Spears noted H-2A is archaic in its paperwork and rules and needs an overhaul.

Lichte also touched on H-2A in a brief interview with DTN because the program does not allow for year-round workers. Livestock groups have pushed for years to get Congress to reform the program.

The House passed the Farm Workforce Modernization Act last year that would expand H-2A for three-year work provisions, but the Senate has not taken up the bill so far.

DEERE DISRUPTIONS

Ben Smith, who focuses on marketing precision agriculture products for John Deere, said every one of Deere's factories has been disrupted because of supply chain issues in one way or another. A product like a sprayer may have thousands of parts with Deere relying on an array of suppliers. If those suppliers can't get a product quickly, it creates a ripple effect.

"He can't deliver the stuff we need because he is waiting on parts," Smith said.

All these delays have led to companies such as Deere revisiting the "just-in-time" inventory deliveries because that system has collapsed, Smith said.

"We are trying to talk strategically on how we deal with inventory going forward," Smith said.

Talking about microchips, Smith said another problem coming out of Russia's invasion of Ukraine is those countries extract and export a few key rare gas products that are considered crucial for producing semi-conductor chips. The lack of chips is now affecting a lot of industries.

"So, when a Russia-Ukraine conflict comes up, there are raw materials that are very critical, and there's not a lot to go around," Smith said. "It just disrupts a lot of things very quickly."

REGULATORY FIXES

Looking at regulatory fixes, Spears said permitting needs to be accelerated for fertilizer mining operations. "It takes time and lot of money right now," he said.

DTN highlighted the prospect of a new potash mine in Michigan, including the costs and permitting to make it happen. See "Michigan Company Hopes to Build K Mine" here: https://www.dtnpf.com/….

Spears also added one quick fix dealing with the trucking industry involves hours of service. Truckers right now are restricted to 10 hours of driving before required rest times. Spears said a lot of jobs right now have 12 hours of work. If trucking hours of service were bumped to 12 hours, even temporarily, that would be a 20% increase in work productivity.

Chris DeMoss, director of plant foods for MFA Inc., said one area he would like to see the country invest in more is rail infrastructure. While crop production and yields have increased dramatically over the past few decades, rail capacity has not kept up with demand. Rail has taken on far more intermodal shipping as well.

"If we don't have a way to get our goods to market, it doesn't matter," he said. He later added, "There's just not enough rail capacity right now."

DeMoss also touched on long-term concentration and industry consolidation. He pointed out there are now only two Canadian potash providers, for instance.

"We have squeezed everything down to one or two manufacturers, so when there is a disruption, it is a major crisis," he said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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