Farmers and the flood: The best -- and worst -- of times | St. Louis Public Radio

Farmers and the flood: The best -- and worst -- of times

Jun 23, 2008

This article first appeared in the St. Louis Beacon: June 23, 2008 - Devastating floods along the Mississippi River may have caught most of the media attention in recent weeks, raising fears of higher food prices and damaged crops in an increasingly global food market.

For weeks, however, farmers throughout Missouri and, to a lesser extent, Illinois, have been struggling through the wettest planting season on record, not to mention paying high prices for fuel, fertilizer and seeds.

Yet some farmers -- specifically those who were able to get their corn and soybeans planted on schedule this spring and have not suffered flooding or too much rain that can kill a young crop -- stand to have one of their best years ever.

That is, if grain prices remain at record levels (nearing $8 a bushel for corn and more than $15 for soybeans) and their crops don't suffer hail or drought damage and finally are sold for those high prices.

In 2005, corn was selling for a statewide average of $2.03 a bushel, and it hit $3.95 last year. Soybeans statewide averaged $5.67 a bushel in 2005 and went for an average of $10.50 a bushel last year. Similar prices prevailed in Illinois.

"There are going to be a lot of localized losses this year," said Gene Danekas, director of the U.S. Department of Agriculture's statistics office in Columbia, Mo. For Missouri agricultural statistics, click here; for Illinois statistics, click here.

One has to keep news reports of flooded areas in perspective, Danekas said. On the Missouri side of the Mississippi, if every levee broke, he calculated that 600,000 acres of farmland could be flooded and their crops ruined. But some levees have held, and some have not. In contrast, the Agriculture Department's estimate in March of the total Missouri acreage planted in soybeans was 5.7 million, with corn at 3.1 million, for a total of 8.8 million acres in two of Missouri's primary commodity crops.

The Agriculture Department will release a revised estimate for the country on June 30. The department's first crop yield estimates will come out Aug. 12.

Until then, Danekas and other observers have noted, all guesses at the impact of the flooding in Iowa and along the Mississippi and its tributaries are simply speculation. But the department has said that corn yields could be down an average of 2 bushels an acre because of late planting.

When the rains came

Scattered, persistent rain all through the spring, with the exception of the Bootheel, where producers are irrigating, is the local farmers' story this year.

"The period of December through May was the wettest on record for Missouri, going back to 1895," said Pat Guinan,  the state's meteorologist at the University of Missouri at Columbia. "In mid-Missouri, we have had 25 to 28 inches of rain this year. That's six to seven inches above normal."

"Corn is supposed to be knee high by now ... not the water."
Credit Bruce Beattie | Daytona Beach Journal | St. Louis Beacon archives

All of that rain means farmers have had fewer chances to plant their corn, which should be in the ground by mid-May, to make the best yield. Soybeans can be planted later, through June and even into July, and still make a decent crop.

Guinan also noted that temperatures overall also have been below normal, which has slowed evaporation of moisture and water standing on fields.

These unusual climatic conditions have challenged farmers this year in exceptional ways, and the recent five-year Farm Bill, enacted over President George W. Bush's veto, will have little impact as long as market prices for corn and soybeans remain above the government price-support level.

"The weather has caused considerable stress on farmers," said Melvin Brees, an agricultural economist with the Food and Agricultural Policy Research Institute at the University of Missouri at Columbia. "At the beginning of the year, they could look forward to high commodity prices. Some made early sales of their (future) crops at what looked like high prices.

"Now, it may be that they have a drastically reduced crop of corn or soybeans this fall because of all the rain. That means they will have to cover those contracts by buying grain at record-high prices."

Brees added that livestock producers who raise beef and dairy cattle, hogs, chickens and turkeys -- all substantial factors in Missouri's agriculture -- are facing exceptionally high grain prices. And those grain prices will add considerably to their costs of production. They will seek higher sale prices for their livestock, or they will have to thin their herds or even shut down operation.

Even farmers who bought federally subsidized crop insurance may find they bought coverage at too low a level to recoup the costs of fertilizing and planting their crops.

HOW THE FARMERS RESPOND

One farmer who raises soybeans and corn in Maryland Heights, Warren Stemme, has had to replant about one-fourth of his 480-acre corn crop on rich Missouri River bottom land he owns and rents on some of the last undeveloped bottom land in St. Louis County.

Like many farmers in the two-state region, Stemme had to replant part of his corn crop because the seemingly incessant rain all spring threatened the young corn right after it was planted or began to grow. Moreover, Stemme said, reflecting the experience of other farmers, "my nitrogen fertilizer costs this year are 41 percent higher than last spring."

Some producers have planted their corn crops two or three times because rain has killed the young corn with excess moisture. Each time a farmer plants, his costs go up because of the fuel, seed and time he needs to replant.

And any corn planted after May 15 is not expected to produce high-yielding ears at harvest time.

Many farmers will forward-sell their grain for delivery late this year or next year, after storing it in grain bins they own or rent.

Stemme, who uses forward selling as one risk management tool, said he has been more cautious this year because of the weather.

"We can't be sure this year until it's in the bin," Stemme said. "We have another big rain that would knock out the corn we have just planted."

Or a hail storm or high winds could flatten a standing corn crop.

Any of those conditions could imperil crops in one of Midwestern farming's most unpredictable years.

When he saw the Missouri River rising near his 2,000-acre grain farm in Atchison County in extreme northwestern Missouri, Richard Oswald quickly decided to empty the basement of his home.

He also emptied 20,000 bushels of corn and sold them in nearby Hamburg, Iowa, for about $6 a bushel.

Compared to previous years, that is a very good price. But Oswald had been hoping to hang onto his corn a little longer and catch the market at about $8, if possible.

At 58 years old and having survived several floods, most recently in 1993, Oswald said he no longer enjoys the challenges of farming under such uncertain conditions. He is turning over much of the family operation over to his son.

"I don't have anything to prove," he said.

Many farmers in Missouri and Illinois aren't in that position and have to keep on raising grain and livestock to pay for their costly equipment and land, plus living expenses.