Surplus crops expected despite record rain in May

Stormy outlook for grain markets

There's a common farmer's adage "rain makes grain," but many Midwestern farmers this year are being unfortunately reminded that there can be too much of a good thing.

According to the National Oceanic and Atmospheric Administration (NOAA), May 2015 was the wettest month on record for the entirety of the 121-year database, with much of the Great Plains getting hardest hit. Early June has had heavy rains as well, leaving many areas at flood risk.

Young corn and soybean plants are especially sensitive to excessively wet conditions, which can force farmers to replant fields — an expensive prospect.

Unfortunately, many fields are too wet to replant, and farmers are running out of time to get a second crop in the ground.

Meanwhile, as farmers prepare to harvest winter wheat, many are worried that flooded fields will damage their crop, making it unsuitable for harvesting.

Despite these concerns, the U.S. is likely to produce large crops this year, leading to another year of surplus. The potential surplus of corn, wheat and soybeans was reinforced Wednesday by the USDA, keeping a lid on prices, which stood Friday at $3.54, $5.06, and $9.43 per bushel, respectively.

After years of fighting that stretched from Midwestern feed yards to Congress and even to the World Trade Organization, it appears that the U.S. is going to abandon its law requiring country-of-origin labels on meat packages after the U.S. House voted Wednesday to lift the rule.

Known as country of origin labeling (COOL), the law required a label on fresh meat products to tell consumers what country the animals were born, raised and slaughtered in.

U.S. meatpacking companies widely opposed the rule, as it made for cumbersome tracking and segregation of animals, while Canadian and Mexican meat producers complained that it hurt their ability to sell to the U.S.

American ranchers and other meat producers were largely seen as benefiting from the law and may see their prices undercut by imports. Adding insult to injury, the cattle and hog markets dropped this week, trading for $1.52 and $0.81 per pound, respectively.