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The reality of weather risk

Your Farm Business

November 4, 2011
From Wayne Schoper and Rich Baumann , The Journal

From Wayne Schoper and Rich Baumann

South Central College

(This information is from Dr. S. Elwynn Taylor, Iowa State Univ., from an article he wrote a few years ago.)

It does not seem so many years ago that we were admonished: "Plant fence row to fence row." The demand is greater than the world can supply was the cry. Echoing from Mountain to Plain was the companion assurance, "the modern hybrids have made us free from drought." The age of short crops had passed and we could expect corn yields to increase nationally by 3%+ per year.

Indeed demand was high and the dreaded "population bomb" was proclaimed to be entering the mushroom cloud phase. Also books were appearing on the disastrous consequence of the "global cooling' that was threatening our very ability to produce the minimum needs of food and fiber. The fears of the future were not unfounded, but the vision of the "prophets" was clouded. The population has blossomed and war and petulance has continued unabated. Population control by starvation is known, but to a lesser proportion than we experienced in the early 1950s. In the US the crops flourished from 1957 through the early 70s without the tribulations of drought in the Midwest.

It became clear that it was not the plant breeding that brought the relief from drought; it was the global cooling, at least as best as we can tell. When Drought did strike (1974) it reduced yields by a percentage not unlike the droughts had previously. The "new" hybrids were indeed superior in that the yield trend was up, the potential yields greatly expanded and even the worst year could be expected to be "better" than the best years of the early part of the centaury. But the sensitivity to drought as expressed in the percentage reduction of crop yield was unchanged (and remains so until today).

I only mention this history from over two score years ago because it has a tone not foreign to the words we hear this year. Some proclaim that we have drought weather as extreme as we experienced in the "Dust Bowl" and yet we have no repeat of the Dust Bowl. But they speak

without data. Do not think because Florida was free of major hurricanes from 1966-1991 that hurricanes are a thing of a past age, although many seemed to think exactly that until the swarms of storms of 2004-5 brought devastation to great tracts of the costal area and reported $10 Billion in loss to the Midwest farmers from a simple reduction in the shipping capability of the Mississippi.

A look at the history of climate kept in the proxy record of trees demonstrates that drought in the forests, though not exactly indicative of drought in crops, has a recurrent pattern over the past 8 centuries. The pattern is merely 800 years old, but the record is clear over that recent period: major drought has a measure of periodicity that approximates 19 years. In fact it does not appear uncommon for major drought events to be separated by 19 years and in the past 800 years the longest interval between major droughts appears to be 23 years. A generation grew to be adults between the 1955 drought and the 1974 drought, just as one had between the 1936 drought and the drought of 1955, and just as one has since the drought of 1988.

The reality is: weather tends to do things it has done before. A generation without drought should not neglect preparations from a sense of "it will not happen." Even in this time of expanding demand and greatly improved genetics with modern management to match, we must be as prepared to face a national corn yield averaging 110 BPH as we are to experience the promise of great yields and prices that sound much better than I have heard in many years. It takes a bit more than having a drought "due" to result in reduced crops, but some of the symptoms of a possible drought are beginning to appear: Large temperature variability was observed in the winter of 2006-7 in 1988 temperatures were well into the 90s in much of the Corn Belt in May and there was damaging frost in central Iowa on June 10th. The Southeastern U.S. is on the dry side of usual this spring, much as it was at the beginning of 16 of the past 17 droughts. Production risk is up by 8% this year and that makes "Risk Management" at least 8% more important to producers.



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