NOAA: Warmer Winter in 2014-15

off03_tempOn the heels of a cool, wet spring and summer in the midwest the Climate Prediction Center is forecasting a warmer, drier winter for the region, with the driest area sitting over the Great Lakes and extending south through Kentucky and Tennessee. While the deep south, southwest and at least the southern half of the west coast are expected to experience above average precipitation January through March, it’s unlikely to relieve the historical drought griping California’s agricultural bread basket. Meanwhile, the entire west coast is also expected to continue experiencing above average temperatures.

The warmer winter temperatures will no doubt be welcomed by midwesterners and could help avoid a repeat of the propane shortages and railway backups seen last year, but if the predictions come true they could also catch producers who continue to grapple with input purchasing decisions in a tight spot as planting time approaches quicker than expected and the market is flooded with last minute seed, fertilizer and chemical shoppers. “There is a lot of trepidation in the market right now,” said Galynn Beer, Senior Sales Manager for AgroLiquid, “Growers are waiting for inputs to sync with outputs. The risk is if that waiting game goes on too long and a rush on the market later has the exact opposite effect they’re looking for.”

Most ag companies run promotions through autumn and early winter to reward producers who plan ahead and help alleviate the inevitable glut of last minute orders. This year, Beer says, is a perfect example of why those promotions are so important for both agribusinesses and their grower-customers. “Input purchases are not unlike futures contracts,” Beer added. “Pre-buying inputs during or directly following harvest for next year is one way to lock in a fair price when there is a lot of uncertainty still ahead.”