Harvest hopes

Conditions combined to make 2004 a good year for farmers. This year, it seems, many will reap a harvest of bad luck.

Yields are down. Crop prices are low. Shipping costs are up. And prices for the oil and gas that provide everything from fuel for tractors to raw material for fertilizer stand at all-time highs.

The Midwest's worst drought in 17 years prompted a federal drought declaration, making farmers in Cape Girardeau County and almost every other Missouri county eligible for extra help from Uncle Sam.

Farmers who experience at least a 30 percent crop loss will be eligible for emergency loans from the federal Farm Service Agency.

Widespread irrigation and timely rain from the remnants of Hurricane Dennis spared Southeast Missouri the worst ravages of the drought, said Judy Grundler, program administrator with the Missouri Department of Agriculture.

Mammoth crop yields last year included an average of 162 bushels of corn per acre statewide, Grundler said. This year, the statewide average is 99 bushels per acre, but Southeast Missouri farmers can expect about 142 bushels.

Soybeans averaged 45 bushels per acre last year, she said. This year, the statewide average is 31 bushels per acre, with Southeast Missouri farmers expecting 36 bushels.

Rice, cotton doing better

Rice and cotton -- crops that won't grow in Missouri outside of the southeast because of climate -- aren't doing as poorly as other cash crops. Rice yields are actually up this year, she said. Cotton yields are down, but they are well above those experienced before the state began an extensive boll weevil eradication program.

Irrigation helped farmer Jim Riley, who grows 800 acres of corn on his family farm in Bernie, Mo. He expects his farm will lose some yield because of the drought but said the loss won't be as bad for him as for others.

"In our area, down in the Bootheel, so much of it's irrigated," he said. "We're not like in Perryville, in Cape. We missed the rains here, but at least we're fortunate enough to be able to irrigate."

The harvest will begin in about three weeks for John Lorberg, who farms 900 acres of soybeans and corn in Gordonville. He, too, said he won't feel the effects of the drought to a large degree.

"We really got some perfect, timely rains," he said. "I'm going to have some pretty decent crops. I guess I'm bucking the trends, and I'm happy to do so."

A trip not far north or west, however, shows the impact of the dry spell, he said.

"I've talked to some people who are only going to have half a crop," he said. "Some places will have less than that. It's terrible."

In central and northeast Missouri, Grundler said, corn yields will struggle to beat 60 bushels per acre. "You get into certain districts, and people really suffered," she said.

Some farmers are taking a total loss on their corn crops and cutting it down to use as animal feed, she said. A late frost in the northeast part of the state "nailed the hay crop," she said.

Wondering about prices

Crop prices in a drought year befuddle the farmers and discourage the agricultural bureaucrats. During the last big drought in 1988, worries about yields pushed the futures price of soybeans above $10 a bushel and corn rose to more than $5 a bushel. A futures price is what traders are willing to pay today for delivery of crops at a later date.

On Friday, the price of soybeans was below $6 a bushel at the Chicago Board of Trade and the corn price hovered near $2 a bushel. Those prices are in the traditional trading range for both crops.

Riley is also dubious about low corn prices.

"You wonder if the government isn't manipulating the market," he said. "The government says it has so much on hand, but then six months later, they'll say they didn't have it."

Lorberg said he doesn't understand the current market either. "If you know the answer to that, I'd almost give you a thousand dollars," he said. "Nobody can believe what's happening. I can't understand it. I think it's being manipulated, too."

Prices are going down, which is unusual in a drought year, Grundler said. But the drought is limited in scope, she said. The 1988 drought covered a much larger territory.

"We've got areas of the country where crops have done very well," she said. "And in northwest Missouri, crops are doing very well."

Foreign competition

A Southeast Missouri grain dealer in the business since 1979, Jerry Day of Consolidated Grain and Barge in Scott County blamed foreign competition for the low prices.

"There was a short crop, and people were hungry for grain," Day said of the 1988 price spike. But last year's crop hasn't been consumed, he said, and South American producers export as much or more than American farmers.

"Then it was one crop a year and the U.S. is what everybody depended on," he said. "Today, every six months you have a crop."

Dry conditions force crops to mature faster and farmers to harvest earlier, said Dr. Wes Mueller, chair of the department of agriculture at Southeast Missouri State University.

Harvesting typically starts around Sept. 1, but he said several Southeast Missouri farmers have already started. Farmers are telling him they are experiencing a 15 percent to 30 percent decrease from last year's yield.

But it's not as bad as it could be, Mueller said.

"We're not in near as bad a shape as Iowa and Illinois," he said. "They didn't get near the rain we did."

As far as the low prices, Mueller said he is surprised. The forecasts over much of the corn-growing area, he said, are for much lower yields. Traditionally, that would lead to higher prices boosted by greater demand.

"That just isn't happening," he said. "I fully expect them to go higher as the harvest progresses."

Higher prices, if they occur, would help soften the blow of expensive fuel and low water levels in the river. When Day buys grain, he uses Chicago prices as a benchmark, then adjusts it based on what it will bring at the New Orleans port. The cost of shipping and his operation costs are also part of the equation.

Low water levels and high fuel prices have driven the cost of shipping a bushel of grain from 20 to 25 cents to nearly 40 cents, Day said.

Emergency loans for farmers hit by the drought will carry a 3.75 percent interest rate and are available to farmers until eight months after the drought declaration. Loan amounts are based on a farm's five-year production history, and past yield averages are compared with the disaster year yield average to determine the size of the loan.

The disaster aid will help, Day said, "but it's just not the same as coming in and selling a good crop at a decent price."