Agriculture conditions expected to improve in 2005

Northern Colorado is still experiencing drought conditions, snow pack and rainfall levels improved enough in 2003 and 2004 to begin rebuilding depleted water levels.
“In the Colorado-Big Thompson project we are roughly about 90,000 acre feet below normal over at Granby,´ said Brian Werner, spokesperson for the Northern Colorado Water Conservancy District. The water district operates and maintains the Colorado-Big Thompson project, which delivers water to Northern Colorado. Lake Granby is the system’s largest reservoir.
“On Dec. 1, our average in the reservoir is 300,000 acre feet and this year it is 210,000 acre feet, or 70 percent of average,” Werner said.
Water levels in the entire water system are at 46 percent full and the 47-year average is 60 percent full. Werner said the water district would not consider the drought is over until levels system-wide return to normal.
Still, predictions for 2005 look positive and farmers are expected to return to planting at normal levels.
The corn is still in the fields, because moisture levels are still too high to store the corn. This isn’t expected to impact production next year, because the corn will come out of the fields to allow farmers to plant again.
“The corn crop has been unbelievable – we are seeing yields of 160 bushels per acre which is 20 bushels higher than the trend line,´ said Clark Miller, managing broker, LaSalle Street Investments. “We are seeing so many bushels because of genetic advances and phenomenal weather across the corn belt.”
Wheat conditions are expected to improve with increased water supplies. For the 2005 winter wheat crop, which will be harvested in July, farmers expect to harvest about 2.3 million acres.
“The conditions are the best we have seen since ’99,´ said Darrell Hanavan, executive director, Colorado Association of Wheat Growers and Colorado Wheat Administration Committee. “We are looking at potentially 2.5 million acres.”
Miller anticipates the Kansas City board price of wheat will range from $3.25 to $3.65 per bushel next year.
The cattle market is expected to remain volatile for three reasons: continuing uncertainty surrounding the opening of the Canadian and Asian borders, tight supply because of drought restrictions, and competition from lower-priced protein products like pork and poultry.
Currently the U.S. is closed to Canadian beef, while Japan has stopped taking American beef. If the Canadian border opens before the Asian border, producers are expecting a saturation of beef in the U.S. forcing prices downward. If the Pacific Rim begins importing beef at high levels again before the Canadian border is open to meet the need, it is very possible the shortfall will force American consumers out of the market. The timing of the border openings is critical and needs to be handled carefully, experts contend.
The drought forced producers to thin herd levels, and it is expected to take them two years to rebuild herd numbers.
In 2005 look for increased female value as cow/calf producers look to increase herd size and watch for feedlot margins to get increasingly tight.

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