Do I Have Thoughts About Crop Tours?

• Though I never participated in a Crop Tour, I've seen them from nearly every angle.

• There are countless stories providing plenty of fodder for those of us non-believers in such things. 

• Like most everything else, though, the purpose of such tours seems to be market reaction. And that doesn't always go as expected. 

I’m going to go out on a limb and say most of you have likely heard the annual Midwest Crop Tour is going on this week. Nearly all the industry will be glued to social media waiting for each and every update from hand-picked corn and soybean fields across the US Midwest, as the name would suggest. Those of you who know me well will not be surprised when I say I could not be less interested in what the “scouts” find. And while I never took part in any of these tours; Midwest, Wheat Quality, etc.. I have a number of stories from and of those who did. So without further ado, I present to you “Fun with Crop Tours”. 

Drunks Across Kansas: As you know, I grew up on a small wheat farm in south-central/southwest Kansas (depending on who I’m visiting with I tell them I’m from the little eye-blink town Lewis). After graduating from good ol’ Fort Hays State University in the late 1980s with my Bachelor of Arts in Political Science (yes, that was as useful as it sounds), I spent time working at the Lewis Co-Op before moving on to be the grain merchandiser at the Great Bend Co-Op in central Kansas. It was at the latter where I heard more about the annual Wheat Quality Tours that sent “scouts” across Kansas (and into parts of Oklahoma) each May to report on how good and/or bad the HRW crop was. The stories that filtered back to the co-op from those who encountered the “scouts” had more to do with the amount of alcohol consumed each evening, leading to the Tour’s nickname Drunks Across Kansas. 

When Alfalfa Became a Cockroach: I joined DTN as the Grains Analyst in January 2004. Shortly thereafter, with the newsroom expanding under the leadership of then Editor in Chief Urban Lehner, another two reporters/editors were brought in, Scott and Tony. The latter was younger, and one of his first assignments was to take part in the annual Wheat Tour, joining with tour veteran Russ^[i]. Their route took them to St. John, Kansas^[ii], just south of Great Bend and home of the famed Stafford County Flour Mill. Well, according to Russ, it turns out Tony was allergic to wheat dust, so when the tour stopped to visit the flour mill it sent him into a sneezing fit for the ages. Shortly thereafter, the cars stopped on a dirt road with a wheat field to the east and alfalfa field to the west. Tony, not familiar with farming at that point in his career, headed west to scout the yield potential of the alfalfa field. The funniest part of the story is he wasn’t alone. Russ was kind enough to herd the wandering scouts back to the east, after letting them do their work for a bit. 

Jesus Take the Wheel: Unfortunately, Scott passed away a year or so ago. But I still have a classic story from the first time he took his turn on the Midwest Crop Tour. I don’t recall which leg of the tour he was on (east of west), but I do recall the guidelines to invited scouts included “dress appropriately”. But Scott was an independent character, in the best sense of the word^[iii], and was not going to be told how to dress to walk through corn fields. So off he went with his cargo shorts and what are commonly known as “Jesus shoes”, leather sandals held on by straps. And while stories filtered back that it didn’t go all that well for Scott, he came back undaunted, talking of how he enjoyed the experience overall. However, if I recall correctly, the next time he went on tour, he took some boots with him. 

Corn Porn: Back in 2012, the US was feeling the effects of a strong drought and the social media site then known as Twitter was still young. What do these two things have to do with that year’s Midwest Crop Tour? It seems every scout was taking pictures of fields filled with Pineapple Corn. In response to extended severe drought, the leaves of the corn plant curl and turn a grayish color, resembling a pineapple. Keep in mind one of the myths of the internet has long been the most-searched topic is porn. But during crop tours, particularly if a drought is in place over all or parts of the US, social media addicts can’t get enough of Pineapple Corn pics leading to the phrase “Corn Porn”. It’s interesting to note how the December 2012 corn futures contract behaved as that year’s tour churned out its Corn Porn. Prior to the tour, the contract hit a high of $8.49. Once the pictures flooded Twitter, Dec12 started to fall, finishing the month of August just below $8.00, and down 5.5 cents for the month. This created a long-term top in the market as it then crashed to an October 2014 low below $3.20.

Hit the Road Jack: I don’t recall what year it happened, but my continued making fun of the Midwest Crop Tour was a contributing factor to DTN being disinvited from participating in the annual event. Of course there were other issues, but one that kept cropping up was the fact the newsroom’s Senior Market Analyst – yours truly – was not respectful enough of the process or its results. Really? A process that sent people from all walks of life out into corn fields (or maybe sorghum/milo, depending on the individual’s knowledge of crops) to do some heavy duty “guzintas”^[iv], only to have the folks in charge ‘revise’ the final number. That’s how it was back in the day. (I have no idea how it works now. Again, I have not followed it for more than a decade.) DTN, along with many others, now conduct ‘virtual tours’ using data supposedly collected from a variety of satellite services. All of this for numbers that, in the end, and in reality, don’t mean anything.

People struggle with that idea. They always have. But if one takes a step back and looks at the forest rather than an individual tree, it doesn’t matter if the imaginary national average yield number is 120 bushels per acre (bpa) or 180 bpa. It’s just a number. The real issue is what the market thinks about supplies in relation to demand short-term, intermediate-term, and long-term, regardless of national average yield. And we can track the changes in this opinion every day, week, and month by studying the trends of futures spreads, most notably how much commercial carry is covered by both individual spreads and the market’s forward curve. 

But given most of the folks who track these tours the closest are the same ones who are self-proclaimed “big fans” of NASS’ weekly crop condition updates, aka the Kardashians of Grain Reports, the industry will continue to wet itself in anticipation of these crop tours. 

^[i] Both Russ and Tony are ‘currently’ good friends of mine, all these years later and different paths taken. (My use of the word ‘currently’ is an inside joke. As an editor, Tony would take this out every time so I made sure to put it in as often as possible.)

^[ii] Those of you who follow college basketball or the National Basketball Association (NBA) may be familiar with the name Dean Wade. Dean played his college ball at Kansas State University and has played professionally with the Cleveland Cavaliers for many years. A couple sidenotes: I played sports against Dean’s dad when I was in high school, and my older brother coached against Dean, to no avail, when he was a high school basketball coach. 

^[iii] A story within the story: For one of the countless USDA WASDE reports I decided to play along with the rest of the industry and sent an email out to the newsroom, asking for their guess on what the average US corn yield would be. Of course I wasn’t serious, though some took it that I was and tried to do some actual calculating. Scott was one of the first to reply, typing only “42”. I puzzled over this for a moment before walking to his desk and asking him about it. He looked at me as one would a fool and replied, “From the Hitchhiker’s Guide to the Galaxy. ‘42’ is the answer to everything.” In honor of Scott, that has been my standard answer any time I’m asked the same question over the years since. 

^[iv] Do you remember the Beverly Hillbillies, and Jethro’s amazing math skills?