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Floods create crises for Midwest farmers

By LINDA McGURK
Indiana Correspondent

BLOOMFIELD, Ind. — Experts agree it’s still too early to assess the full extent of damage caused by recent severe weather across the Midwest. But for individual farmers who were pounded by wind, rain and the worst flooding in a century, the destruction is incomprehensible.
“This is the most devastating it’s ever been for us,” said Aleta Crowe, whose family farms nearly 2,000 acres of crop ground in Greene County, Ind.
Two weeks ago, Crowe’s farm was hit by a tornado, which took down trees and power lines and severely damaged several buildings on the property. Before Crowe and her husband, Steve, had even begun to recover from the wind damage, heavy rains started falling.
More than 10 inches fell over neighboring Owen County during the weekend of June 7-8, ultimately pushing White River over its banks and immersing Crowe’s cornfields in water and debris. “By the time we got up Monday morning, we had over 1,000 acres under water,” she said.
Like other affected farmers, Crowe and her family now face some tough decisions on how to deal with the flooded fields, which were almost completely planted – once they can get into them, that is.
“As the water goes down off the highest ground, and if it dries out soon enough, we’ll replant it. But I have no idea when the water will get out of the lowest area, and we can’t get in and pick up the trash until it’s dry enough,” said Crowe. “It’ll be a day-to-day decision, but we will try to replant until it becomes a losing battle.”
One thing is certain – the perfect crop so desperately needed to meet increasing demand is not going to materialize this year, neither for the Crowes nor for the country as a whole.
“We can’t afford to lose another bushel, and the weather is not cooperating at all,” said Chris Hurt, a Purdue University agricultural economist.
The 29 Indiana counties that were originally declared disaster zones by the federal government produced a quarter of the state’s corn and soybeans and at least 15 percent of the wheat last year, according to Hurt. Presuming the yield of these highly-valued crops drops 10 percent due to the flooding, the loss in Indiana alone would top $200 million.
Gov. Mitch Daniels has since asked President Bush to include a total of 44 counties in the disaster declaration. Either way, the numbers likely represent a conservative estimate and don’t account for the damage in Iowa, Illinois, Wisconsin and Nebraska, which were also affected by severe storms and heavy flooding.
In its June 10 World Agricultural Supply and Demand Estimates, the USDA reduced the projected national corn yield to 148.9 bushels per acre, 5 bushels below last month’s estimate and 6 below trend, due to the extreme weather. The heavy rainfall and slow planting progress also prompted the USDA to knock off nearly 400 million bushels from the estimated 2008 U.S. corn crop, which is now projected at 11.7 billion bushels.
“I think the reality is the (loss) could be a lot larger. It will depend on the rest of the growing season,” Hurt said. “We’ve got a long ways to mark the crop down in terms of yield.”
The last time the Midwest dealt with a comparable disaster was in 1993, when the Missouri and Mississippi river systems suffered from severe flooding. That time, yield reduction was 20-25 percent, and the national average corn yield dropped to 100.7 bushels per acre.
Complicating the situation further this year, however, is the growing demand for corn from an ever-increasing number of ethanol plants. The USDA expects the ethanol industry to increase its corn usage by 33 percent for the 2008-09 crop year, while livestock producers and foreign markets are expected to cut their consumption.
The USDA also estimates the ending stocks for corn for the 2008-09 crop year could hit their lowest levels since 1995-96. If the estimate holds true, the United States would only have a 20-day supply of corn by the end of August 2009, close to the record low 18-day supply noted in 1996.
“The difference is that we had a very good crop going into ’96, and now we have a huge demand. Everything is just on the verge of running out, and that was not the case in ’95,” said Hurt. “The corn situation is desperately tight.”
On the soybean side, good news is also hard to come by.
“If everything is absolutely perfect from now on, we could still have a perfect soybean crop. But most years we don’t get perfect,” Hurt said, describing the soybean supply situation as “dire.”
The USDA estimates the U.S. will be down to a mere 15-day supply of soybeans by the end of August 2009, which would be a modern-day record low. If anything good will come of this soggy planting season, Hurt said, it would be that the market is “very responsive” to losses, and corn prices may very well reach $8-$9 per bushel.
“But there’s a point where the end users say they can’t afford it anymore. Within a couple of weeks, we might start hearing about ethanol plants slowing down or shutting down,” he said.

6/18/2008