Kansas farmers were optimistic that a wet winter and rainy spring meant that the 2011’s drought was over. But the rain largely stopped falling after early May, allowing a good wheat harvest for much of the state, but dooming the corn and soybean crops.
Faced with higher prices for corn and other feed, many livestock farmers thinned their cattle herds in the last half of 2012.
The National Weather Service is forecasting no improvement over the region through the end of March, although that was true last year and it rained a good amount through the first four months.
Darin Newson, an analyst with Telvent DTV, sees corn and soybeans prices generally remaining high because worldwide stocks are low, although prices could fall some if South America produces big crops.
Wheat is grown worldwide and stocks are plentiful, but Newson sees the small possibility that wheat prices could rise if weather problems occur elsewhere.
The size of Kansas and U.S. cattle herds will likely continue to fall, and livestock farmers will probably see dramatic fluctuations in costs. If rain comes to the Plains, livestock farmers could start rebuilding their herds again. If not, livestock numbers could continue to fall, which might mean the closing of more feedlots and, possibly, packing plants.
Bottom line: It all depends on the rain.