Story Created:
Sep 3, 2008 at 5:56 PM EST
Story Updated:
Sep 3, 2008 at 5:56 PM EST
CHAMPAIGN, Ill. (AP) — Less than two months after Midwest farmers watched torrential rains and swollen rivers flood their fields, corn and soybean crops are drying under hot, clear skies.
Farmers say they still expect strong crops, particularly considering the wet start. But a hot, dry August will likely take a chunk out of the corn harvest, which is set to start over the next few weeks. And it could hurt the country's production of soybeans, which are still a month or more from harvest.
But economists say that shouldn't pump up grain prices, in part because energy prices have eased, cutting the demand for ethanol. Ethanol production was blamed for part of sharp corn price increases earlier this year that helped fuel food-price inflation.
The country's corn crop is probably as good as it's going to get, University of Illinois agronomist Emerson Nafziger said. That could cut into production that the U.S. Department of Agriculture just three weeks ago said should be a near-record 12.3 billion bushels.
"A crop that was nice and green three weeks ago and just starting to fill grain today is looking yellow and sort of drying up," he said. "It's clearly going to have lower yields."
Ohio farmer Dale Stickel hasn't seen a decent rain since late June, and expects his corn and soybeans to fall short of expectations.
"I don't look for a bumper crop, that's for sure," said Stickel, who farms near Pemberville, about 20 miles south of Toledo.
Corn and soybean prices have swooped up and down all year, pushing up the price of grain-dependent food such as beef, poultry and milk. Grain prices spiked hard when cool weather, rain and floods threatened crops in June and early July, then leveled off as fields dried and farmers grew optimistic.
Along with its prediction for a bumper corn crop, the USDA said soybean production should hit a healthy 2.97 billion bushels.
That figure and the government's expectation for corn are likely to drop a little when the USDA issues its crop production report next week, University of Illinois economist Darrell Good said. Those reports are closely watched by the grain markets.
But Good doesn't expect grain prices to rise dramatically.
"The market doesn't show any concern at this point," he said. "As energy prices continue to weaken, that means corn is worth less to the ethanol producer. We're trimming demand."
No matter the prices, from the farmers' point of view, the dry weather stuck around a little too long.
The National Drought Mitigation Center says much of the Corn Belt — including most of Minnesota and Ohio, Wisconsin and parts of Indiana and top U.S. corn producer Iowa — is in a moderate drought. Southern and eastern Illinois, the country's No. 2 corn state, are dry too. Less than an inch of rain fell across parts of the state in August, less than a quarter of normal, according to State Water Survey.
The timing was bad for corn, which was still developing when the dry weather set in, Nafziger said. Corn in a lot of places has already started turning yellow, he said, a sign that production is coming to a stop.
"Once it doesn't have effective green leaf area, it pretty much stops filling grain," he said.
The growth of soybeans, which are planted after corn, has slowed down, too, Nafziger said. But there's still time, with rain, for the beans to get bigger and add to production.
If southeast Illinois farmer Martin Barbre gets a little rain in the coming weeks, he is looking at a strong 40 to 45 bushels an acre from his 2,200 acres of soybeans.
If that doesn't happen, he expects to lose 3 to 5 bushels an acre. With soybean prices at about $12 a bushel, that would cost him up to about $13,000.
"Our beans are what I'm more concerned about right now," he said Wednesday. "Right now, we're kind of hoping Gustav makes it up here."
The remnants of the hurricane started to deliver rain to parts of Illinois and Missouri Wednesday and more was expected later in the week.
But National Weather Service forecasts say Gustav will do little if anything for the eastern and western ends of the Corn Belt.
And that leaves farmers like Stickel with dusty fields and, unlike most Septembers, uncertainty about just what they'll harvest in the weeks ahead.
"This year I won't know until I get in the field," he said.
Another economist, Bruce Babcock at Iowa State University, said this year could have been much, much worse.
"Given the poor weather early in the season this shows how robust the production system of corn and soybeans is," he said.
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Associated Press writer John Seewer in Toledo, Ohio contributed to this report.