How is La Nina affecting crops in the US and beyond?

Last Week’s Moves

Corn 637-4  (+0.55%)  |  Soybeans 1551-2 (-1.13%)  |  SRW Wheat 785-6 (+0.22%)

KC Wheat 809-6 (+0.65%)  |  Live Cattle 146.900 (+0.50%)  |  Lean Hogs 104.150 (+0.34%)

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Welcome to your weekly agriculture report, where we cover everything you’ll need to know for the week ahead. This week, La Nina causes concerns across the US and abroad, the Avian Flu has a grip on the US, and midwest land values are the highest they’ve been in over a decade.

La Nina is back with a vengeance, affecting crops not only in the US, but also across Europe

Continued drought is expected throughout the spring, possibly into the summer for southwestern US crops. Josh Wills, a climate scientist at NASA’s Jet Propulsion laboratory, says the American southwest “should see lower than normal rainfall this winter… This La Nina may not be a whopper, but it’s still an unwelcome sign for an area already deep in drought.” Since 2020, the La Nina pattern has fit into a larger climate pattern that’s continued for nearly two decades. 

• Where does La Nina come from?... La Nina is linked to the increases in the likelihood of above- and below-average precipitation around the world; the weather pattern appears when energized easterly trade winds intensify the upwelling of cooler water from the depths of the eastern Pacific, causing large-scale cooling of the eastern and central Pacific Ocean. 
• Misery loves company… The US isn’t the only one feeling the effects of La Nina: a significant portion of Spain is also experiencing drought, with rainfalls this winter registering at one third of the average over recent years.

The avian flu has taken flight in the US, putting into effect greater restrictions

A highly lethal form of avian flu is spreading across the US, sparking stricter adherence to safety measures across the country. The disease is already hitting Europe, Africa, Asia, and Canada, however a recent outbreak in Indiana has the US industry on edge. 

• Hoosiers hit… The outbreak at a commercial turkey plant has led to bans of poultry imports from Indiana, while labor shortages have fueled food inflation. Indiana is a stop in migratory bird pathways, and contributes to production making the US the largest producer and second-largest exporter of poultry in the world. 
• Practicing caution… In 2015, a US bird-flu outbreak killed around 50 million birds, predominantly turkeys and egg-laying chickens in the Midwest. The current outbreak has Tyson Foods (TSN) applying heightened biosecurity measures in its East Coast facilities, including reducing the number of trips to farms and spending more time on vehicle sanitation.

Midwest land values have hit highs not seen in a decade

Agricultural bankers of the central Corn Belt have reported a 22% jump in its farmland values during 2021 according to the Chicago Federal Reserve Bank last Thursday. Out of the five states in the Chicago Fed district, Iowa saw the largest increase at 30%. 

• Been a while!... This increase is the largest seen since 2011, and is partially thanks to low interest rates, government subsidies to farmers, strong commodity prices, and high corn and soybean yields. 
• Feeling good… Out of bankers surveyed by the Chicago Fed, 56% expected farmland values to rise in the first quarter of 2022. Only 1% expected a decline. 

While you’re here, check out the latest episode of our new podcast The Food Biz. Check it out on Apple Podcasts, Spotify, or wherever you get your podcasts from!

What else you need to know  

• Avocado(h)-no… On the night before the Super Bowl, the US suspended avocado imports from Mexico after a plant safety inspector received a threat.
• On the rise… The Asian Longhorned Tick has established its presence in 17 states around the US, and presents a growing concern for US health officials. 
• Rah rah renewables… A general shift towards renewable energy has biodiesel producers feeling optimistic about the future. 

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input.