Farmers have a love/hate relationship with Mother Nature, as they are dependent on the weather to make – or break – their crop.
This year, Mother Nature seems to have the upper hand as an unrelenting drought continues to maintain its grip on the Northern Plains states.
The drought has had a major impact on all the crops in the region, including sunflowers.
“In the past week, a larger area of the U.S. sunflower production region has slid into a moderate to severe drought situation with some areas now considered in exceptional drought conditions, the highest category,” commented John Sandbakken, executive director of the National Sunflower Association in the NSA’s weekly newsletter, which came out July 25.
Despite the dry conditions, which are already impacting potential yield for sunflower and many other crops, there is a silver lining of sorts in that prices have been improving.
“(The drought) has led to market prices heating up for bird food and at the crush plants,” Sandbakken pointed out. “The bird food prices in some locations topped $20 per hundredweight this week. Bird food prices have increased about $3.50-$4.75/cwt since mid-June. Nearby prices at the crush plants have gained $3.40/cwt since the market low was set.”
As of July 25, NuSun prices at the Enderlin, N.D., crush plant were $17.55/cwt for delivery in August and $16.70 for delivery in October.
At the Fargo, N.D., crush plant, prices for delivery in August were $16.60 and $17.30 for delivery in October. High oleic prices at Fargo were at $17 for October delivery.
Another positive for sunflower vs. other crops in the region, like small grains, is that sunflowers can handle drought conditions better. That said, even drought-tolerant crops need water.
“Sunflower is very drought tolerant,” Sandbakken said. “However, rain will be needed soon as the plants move from the vegetative to the reproductive stage.
“If drought conditions persist, yield reductions in the hardest-hit areas of the Dakotas will most likely occur, (thus) tightening seed stocks.”
In fact, harvested sunflower acres were estimated to decrease 21 percent from 2016 in USDA’s released acreage report from the end of June.
If there was another positive for sunflowers, unrelated to the drought, it is that the U.S. dollar fell to its lowest level in more than a year, which could help in the area of export sales.
“The decline in the dollar gives importers more purchasing power and boosts the attractiveness of U.S. products to overseas buyers. This could lead to new export business in the months ahead,” he said.
Going forward, Sandbakken reiterated that Mother Nature – the weather – and demand news will control price direction for 2017 commodity sunflowers.