- The Washington Times - Friday, June 13, 2008

INDIANAPOLIS

After a damp, chilly spring, grain farmer Norman Voyles Jr. still had 300 acres of soybeans yet to plant when a monsoonlike storm dumped 10 inches of rain on his central Indiana farm last weekend.

The resulting deluge flooded a quarter of Mr. Voyles’ 1,800 acres of corn and soybeans - one in a parade of drenching storms that have put large swaths of Midwestern cropland under water and thrown uncertainty into commodity markets.

“There was mud on everything that wasn’t under water,” said Mr. Voyles, 49. “We’ll know for sure by this weekend how much we’ll have to replant, how many fields are gone.”

With food prices already high and corn now commanding record prices, the flooding in Indiana, Illinois, Iowa, Wisconsin and other states will likely push those prices even higher, said Christian Mayer, an analyst for Northstar Commodity in Minneapolis.

Corn prices climbed further into record territory Thursday. Corn for July delivery rose 8.25 cents to $7.115 a bushel on the Chicago Board of Trade (CBOT), after earlier rising to a new all-time high of 7.18 a bushel. It was corn’s sixth straight trading record in as many days. Prices broke past the $7 barrier for the first time Wednesday.

Prices for the corn in the ground have jumped even higher. Corn for December delivery soared to a record $7.485 a bushel on the CBOT before falling back to $7.425, still up 10.75 cents.

Corn’s spike has raised questions as to how long demand will support the unprecedented price level. Livestock owners will likely be forced to slaughter more cattle, hogs and chickens to cope with rocketing corn-based animal feed, and ethanol producers who use corn as their main feedstock also will suffer.

The flooding also has inundated the Midwest’s soybean crop, pushing prices to near record levels. Soybeans for July delivery rose 13.5 cents to $15.30 a bushel on the CBOT, after earlier rising to $15.38. The contract’s all-time trading record is $15.96.

Meanwhile, wheat futures fell 10.5 cents to settle at $8.585 a bushel on the CBOT.

“Until the weather straightens itself out, you’re going to see this higher price for corn and higher food prices for that matter,” Mr. Mayer said.

The recent wave of flooding prompted the U.S. Department of Agriculture on Tuesday to lower the nation’s corn production estimate to about 11.7 billion bushels - or 10 percent less than last fall’s crop.

A smaller corn crop means higher prices for the corn-based feeds used to fatten cattle, hogs and chickens.

And higher feed prices will eventually drive up meat prices because many livestock farmers are likely to slaughter some of their livestock, reducing meat supplies, said Darrel Good, a professor of agricultural economics at the University of Illinois.

The recent flooding in some of the nation’s top corn- and soybean-growing states comes after a wet, damp spring brought planting delays, which often translate into reduced yields.

In Iowa - the nation’s top producer of both corn and soybeans - about 14 percent of that state’s soybean crop is not yet planted, Palle Pedersen, a soybean agronomist at Iowa State University, said Wednesday.

Iowa’s flooding is only expected to worsen if another three to five inches of rain falls, as forecast Wednesday night, and Mr. Pedersen said drenched fields already have killed about 10 percent of the soybean crop there.

“It’s close to a disaster area,” he said. “We know we’re not going to get an average yield, that’s for sure, but how low we’ll go we don’t know that yet.”

Although it’s getting late in the planting season, Mr. Pedersen said some farmers will still plant corn - shorter, fast-maturing hybrids - over the next two weeks if fields dry out because they’ve already applied costly corn-specific fertilizers and herbicides to those fields.

He said the wet conditions will bring a heightened risk of insects and disease, which could cut yields further.

Emerson Nafziger, a professor of crop sciences at the University of Illinois at Urbana-Champaign, said the wet spring has been a big disappointment to Midwestern farmers because corn prices are at record highs and soybean prices are approaching record levels.

“It’s a bittersweet thing when farmers see prices go up and they don’t have a very good crop to sell,” he said.

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