Corn Crops: First Drought, Now This.

WILEY, CO - AUGUST 22: Farmer Jay Sneller displays an ear from a drought-ravaged corn crop on August 22, 2012 in Wiley, Colorado. He cut the crop down to grind up and sell as livestock feed. More than 50 percent of high plains areas of eastern Colorado, Nebraska and Kansas are still in extreme or exceptional drought, despite recent lower temperatures, according to the University of Nebraska's Drought Monitor. The record-breaking drought, which has affected more than half of the continental United States, is expected to drive up food prices by 2013, due to lower crop harvests and the adverse effect on the nation's cattle industry. (Image credit: Getty Images via @daylife)

The Missouri corn crop can’t get a break from the weather. Drought slowed growth most of the season. Now moisture from remnants of Hurricane Isaac delays harvest of that corn.

This may not be the year to let the crop dry in the field, says Bill Wiebold, University of Missouri Extension agronomist. Early harvest can pay, even it increases costs.

“Timely harvest is essential to harvest as much yield as possible, even if it means more drying and aeration costs,” Wiebold says.

Delays can lead to broken stalks and dropped ears from a drought-weakened crop. “Poor stalk quality leads to increased preharvest and harvest losses,” Wiebold adds.

In August, USDA estimated the Missouri corn yield at 75 bushels per acre. Wiebold, using a 30-year-yield trend line, calculated the 2012 Missouri corn yield should have made 141 bushels per acre. “That’s a yield drop of 47 percent,” he says. Harvest will verify actual yield.

“With that drop in production, farmers may be cautious to sink additional expenses into the crop,” Wiebold says.

“Harvesting a larger portion of the low yields may outweigh additional costs associated with early harvest,” he says. “Timely harvest as soon as fields are dry enough to withstand combine and wagon traffic is important to reduce harvest losses.”

There are many reasons stalk quality drops following a droughty growing season, Wiebold says. Some disease-causing fungi, such as charcoal rot, grow well in heat on drought-stressed cornstalks. Also, potassium builds stalk quality, but uptake was reduced on dry soils.

Stalk diameters of plants are smaller this year. The lateral expansion was limited by reduced turgor (water pressure) in the plant cells, Wiebold says. Many corn plants died early, allowing fungi to attack the dead cells and break down cellulose and other structural strengths.

The results can be cornstalk breakage below the ear. “It will be difficult to gather those ears into the combine,” Wiebold says.

While rains were needed, storms increase stalk breakage and delay harvest. Gulf air masses meeting a series of cold fronts bring more moisture while temperatures remain high.

High dew points result in fog and damp plant tissue. That stimulates growth of fungi, which further weakens cornstalks.

All the corn that can be harvested, stored and dried will likely be worth more than any prices seen before, Wiebold says. “The harvest should be worth the extra effort.”

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Drought 2012: Harsh Reality of Higher Food Prices

Droughts tend to produce vast yield variations. This week's ProFramer crop tour reaffirmed this tendency and as UBS notes, conditions declined with the expectations of low yields compounded by the harsher reality of poor quality - likely to be a major issue for corn feeders. 

Interestingly, Soybeans looked good from the road but up close (pod formation and beans/pod) were well below normal; and UBS adds to forget the CME for the moment - the cash market is now the attention grabber as they expect it to lead this rally in Ags higher - especially the July 2013s, raising an interesting question of if (or when) the US will restrict exports? Especially with no let-up in the drought conditions.

Lower yields AND lower quality...

With Corn and Soybean conditions data just awful...

and its not getting better anytime soon...

Mississippi River Traffic Moving Again

Barge traffic resumed along an 11-mile (17.7 kilometer) stretch of the drought-ravaged Mississippi River near Greenville, Mississippi, but dozens of vessels waited their turn on Thursday to pass in the shrunken waterway.

The Mississippi River, the country's primary highway for barge traffic, has dropped as much as 14 feet in the drought that has also withered crops in the Midwest and triggered wildfires in the West.

The latest incident occurred around dawn on Wednesday, just hours after the Coast Guard opened the channel near Greenville. Seventeen of the roughly 100 ships stuck since Monday made it through before one became lodged in the sand, forcing authorities to close the channel again for roughly 12 hours.

Traffic resumed late Wednesday afternoon with southbound vessels going through first, then northbound. After all those boats get through, the Coast Guard will continue directing river traffic on a staggered schedule, Gomez said.

As of Thursday morning, some 50 vessels remained backed up in the channel, waiting for their turn to pass.

Barge operators typically haul some $180 billion in goods annually, and the Mississippi River is their main artery with some 566 million tons (513.5 million tonnes) of freight going up and down the inland waterway each year, according to the American Waterways Operators, a national trade association representing tugboats, tow boats and barges.

The drought's effect on the river has caused logistical and financial woes for the barge industry.

Barges must unload 17 tons (15 tonnes) of cargo for every one-inch loss of water and 204 tons (185 tonnes) for every one-foot (30.5 centimeter) loss of draft, said Tom Allegretti, president of the trade association.

Draft is the vertical distance between the ship's waterline and the lowest point of its keel.

Allegretti said it would take 130 semi trucks or 570 rail cars to haul the freight unloaded by one large barge on the Mississippi River under those conditions.

OPERATORS LOSING MONEY

Barge operators are losing an estimated $10,000 per day for every one of their boats that sits idle near Greenville, said Ann McCulloch, spokeswoman for the American Waterways Operators said.

With 97 vessels idle on Monday and Tuesday, and 105 vessels idle on Wednesday, according to Gomez, that's nearly $3 million in lost revenues in three days.

"It's a day-to-day situation now to manage the stoppage," McCulloch said.

If water levels drop further, prices could rise on the raw commodities commonly shipped by boat, including coal, grain, petroleum and steel.

Taxpayers also share some of the drought's financial burden. The U.S. Army Corps of Engineers has dredged the river almost nonstop since the start of the drought with equipment costing as much as $85,000 per day, Corps spokesman Kavanaugh Breazeale said.

Dredging removes the silt that falls to the bottom of the river - a problem that accelerates as water levels drop. The Corps must keep the channels at least nine feet deep and 300 feet wide for safe passage of vessels.

Conditions were expected to improve in the short-term near Greenville, where the Coast Guard projects the river will rise about one foot by Monday.

But it forecasts a one foot decrease by Monday in Memphis, which has had its own headaches this summer. On August 9, the American Queen steamboat - a multilevel passenger vessel carrying some 300 pleasure passengers - got stuck near Memphis.

The river there could hit 10 feet below baseline by Wednesday, the Coast Guard said. That is nearing the historic low set in 1988 when river traffic came to a halt and an estimated $1 billion in revenue was lost.

Reuters - Colleen Jenkins, Greg McCune and Vicki Allen

Drought Worsens In Plains

While other corn growers already have knocked down their drought-ravaged crops to feed them to livestock, Nebraska farmer Doug Nelson still waits for his maize to mature, well aware it won’t be a banner year.

On the day a new report suggested the nation’s worst dry spell in at least a generation is deepening in America’s breadbasket, Nelson said Thursday he expects to harvest anywhere from nothing to 43 bushels per acre on his unirrigated acreage, a far cry from the 120 to 140 bushels he'd typically get. On the irrigated land, he could see 150 to 200 bushels an acre; in previous years, Nelson would see a minimum of 180 bushels.

‘‘For the most part, we haven’t seen a hit like this since 1974, as far as my career goes,’’ said the 61-year-old Nelson, who farms some 5,000 acres near Wayne. ‘‘But we'll have the combines going here in probably another month, and then we'll know for sure.

‘‘You can walk these fields and run into good spots, then walk another part where there’s a different soil and have nothing.’’

That’s part of the growing frustration with an increasing drought in Nebraska and several other farming states, despite recently cooler temperatures that have, at the very least, given people a break from this summer’s stifling heat.

The U.S. Drought Monitor’s weekly map showed that, as of Tuesday, just over two-thirds of Iowa, the nation’s biggest corn producer, was in extreme or exceptional drought — the worst two classifications. That’s up more than 5 percentage points, to 67.5 percent, from the previous week.

Nearly all of Nebraska, Kansas, Missouri and Illinois are in extreme or exceptional drought, with Illinois showing the most dramatic climb, spiking 17 percentage points in one week to 96.72 percent, according to the map.

In neighboring Indiana, where 5 inches of rain fell in some parts over the past week or so, the area in exceptional or extreme drought fell 9 percentage points, to 37.09 percent.

Conditions cooled in the region, but little or no meaningful rain fell, said Mike Brewer, a National Climatic Data Center scientist who put together the latest map, which is released by the National Drought Mitigation Center at the University of Nebraska in Lincoln.

The lack of rain allowed exceptional and extreme drought conditions to continue expanding in the area from northern Missouri and into Kansas and Nebraska, he said.

On Wednesday, the USDA added 33 counties from eight drought-stricken states to its list of natural disaster areas, bringing that tally to 1,821 counties in 35 states over the past six weeks. That’s more than half of all U.S. counties, and the vast majority received the designation because of drought.

Plains farmers have begun harvesting what corn managed to survive, although many growers cut their fields weeks ago, chalking the year up as a loss. Some ranchers have sold livestock because they had no grass for grazing or money to buy feed, the price of which has soared.

In the lower 48 states, there was a subtle increase in the overall area experiencing at least some drought, from 61.77 percent last week to 63.2 percent. There was little change in the overall area seeing exceptional or extreme drought, which went from 6.26 percent last week to 6.31 percent this week.

Rain is expected in the northern Plains in coming days, though it may be too late to save many withered crops.

The U.S. Agriculture Department twice has slashed its forecast for this year’s corn and soybean output because of the drought. In the spring, it forecast the nation’s biggest harvest, as farmers planted 96.4 million acres of corn — the most since 1937. But the agency now expects the nation to produce 10.8 billion bushels, the fewest since 2006.

If that estimate holds, the federal government says it will be enough to meet the world’s needs and ensure there are no shortages. But experts say food prices will almost certainly climb — corn is widely used in products ranging from cosmetics to cereal, colas to candy bars.

While just 1 percent of the nation’s corn crop is brought in from the fields by this time of year, the USDA said Monday in its weekly crop progress report that 4 percent of the harvest is complete. The reaping is farther along in Kansas, Missouri, South Dakota, Kentucky and Tennessee.

In an occupation that’s at nature’s mercy, ‘‘we've got to calculate we’re gonna lose a crop once in a while and calculate that into our expenses,’’ said Nelson, whose northeastern Nebraska farmland is about 60 percent corn, the rest soybeans. ‘‘Sometimes it’s heat, drought, excessive rains, bugs, winds. I guess that’s what keeps us coming back for next year.’’

© Copyright 2012 Globe Newspaper Company.

Drought 2012: A Good Year For Wine?

Most of the grapes in Glenn Warnebold's vineyard in Missouri's picturesque wine country are about two-thirds of their usual size. Others have been reduced to raisins by the drought that burned up many crops across the Midwest this summer.

Yet Warnebold figures it could be a good year with the drought concentrating the fruit's flavors and sugar, which will turn to alcohol during fermentation. His red Norton and white Chardonel grapes, while small, hold the promise of standout wine from a region better known for corn and soybeans.

Wineries have been popping up in grape-growing regions of Missouri, Michigan and other Midwestern states for years, but they've generally been seen more as tourist draws than quality vintners. Some are hoping this year will help change that, and in a summer that has been devastating for most farmers, grape growers have a bit to cheer.

"The fruit will be better, overall, for reds and whites, then last year, when it was wet," said Tony Debevc, who has a 170-acre Ohio vineyard. "If it continues to be dry like this, the wine industry will be better overall. And personally, we can expand in the red category, and it wouldn't necessarily be a bad thing."

That's not to say everything is rosy. The drought still stressed the vines, making them less likely to survive a harsh winter and produce next season. But vineyard owners say the varieties commonly planted in the Midwest have roots that can reach dozens of feet below the surface to get at water tables, making them a bit more drought-resistant.

The harvest will almost certainly be smaller too. Warnebold figures he will get 2,500 cases of wine this year — 1,500 less than what he typically might expect — from his six-acre vineyard atop a bluff overlooking the Missouri River. But he routinely has set cases from each year aside as a hedge against "bad years," so there won't be a shortage.

This year's wines from America's heartland "will be nice, fruity and very approachable and soft on the pallet," predicted Diego Meraviglia, vice president and education director for the California-based North American Sommelier Association.

But he believes the drought has cost some grape varieties complexities that may hinder the wines' abilities to age, meaning "you have to drink them within a year or they'll go bad."

"It'll be enjoyable right off the bat," he said. "But real connoisseurs who drink aged wine will be disappointed."

Warnebold bristled at the suggestion of a shortened shelf life. "I've been to a lot of wine conferences with a lot of wine experts, and I've never heard that theory before," he said.

Brad Beam, an Illinois Grape Growers and Vintners Association enologist, downplayed the debate, saying "a lot of our wine is best drunk on the young side anyway."

Vineyard owners in Ohio said they believe this year's drought is just a taste of what's to come with prospects that the climate generally is becoming warmer and dryer.

Debevc, who owns Debonne Vineyards in Madison, Ohio, said he planted some varieties two years ago that need warm weather, even though they weren't recommended for the area at the time. He said more permanent changes down the road could include harvesting earlier in the year and setting up drip irrigations systems to supplement rain in dry years.

"I think there is a trend I've seen in my lifetime. I've seen more storms than when I was younger," Debevc said. "I think we will adapt. For us in the vineyard industry, it's a good thing. A little more heat, a little more dryness. Personally, it would allow us to have much more mature fruits, certainly in the reds."

Duke Bixler, who owns Breitenbach Winery in Amish country near Dover, Ohio, also planted a variety two years ago that wasn't suggested by the industry for his part of Ohio.

"They're doing very well," he said.

Like Debevc, he's watching the weather and thinking about the future. Hot, dry conditions help red wines, he said, but they're not so good for the fruit and berry wines Breitenbach and many other Midwestern wineries offer.

"Certainly, here in Ohio, and northern Ohio, and the Midwest, I think our heat days are increasing, our sun days are increasing," Bixler said. "I think it is a permanent thing."

At the Stone Hill Winery he manages in Hermann, Jon Held worries the drought "might be the new normal," leaving him mulling investing perhaps $1,500 an acre for more irrigation as a hedge. But at least for this year in the winery's 190-acre vineyard, he said, "it's going to be an OK quality season, and you may actually have stellar quality on some varieties," notably among reds.

In Michigan, where Great Lakes breezes and hilly terrain nurture a rapidly growing wine industry, grapes seem to be one of the few success stories in a disastrous year for most fruit crops. An early hot spell followed by April freezes ruined most of Michigan's tart cherries, apples and other orchard fruits.

But grapevines emerged from dormancy and sprouted buds after the cold snap ended, and the dry summer protected the vines from diseases that run rampant when it's too rainy.

"I say it reluctantly, and knock on wood, but it's been a great year so far," said Mark Johnson, winemaker at Chateau Chantal winery on Traverse City's Old Mission Peninsula.

AP writers John Flesher and Barbara Rodriguez contributed to this report.

Corn Shortage: The Next Big Crisis

By now you know we're experiencing the worst drought in over 50 years which has sent corn prices soaring to record highs. With over 60% of the US in the midst of drought conditions, the USDA has said that 50% of America's corn crop will be in poor to very poor condition.

With corn supplies are at their lowest levels in 17 years and with corn being such a large part of the industrial food chain, we have the 'perfect storm' for serious food shortages.

Corn feeds the chickens that provide us with eggs. Corn feeds the cows that provide us with beef and dairy products. Nearly all soda contain high fructose corn syrup. Even beer is fermented from glucose that originated in corn.

Corn is in margarine, coffee sweetener, icing, gravy, hot sauce, mayonnaise, soups, cake mixes, snacks foods, salad dressings, frozen waffles, and on and on. If you eat produce in any form, it’s likely got corn in or on it: corn was in the pesticide, the cardboard in which it was shipped, even the wax applied to its surface to give it a sheen.

Corn is in toothpaste, disposable diapers, matches, trash bags, disposable batteries, make up, even magazines covers.

Corn in approximately 25% of all items located in your local grocery store. And of course, all the fuel for our cars and trucks contain ethanol which is made from, you guessed it, corn.

And the situation is equally bad for soybeans, the second largest produced crop in the US: today inventories are at their lowest levels in 32 years. And the current drought has resulted in 39% of this year’s soybean crop being in poor to very poor condition.

Forget about Europe and the imminent global financial collaspe, the corn (and soybean) shortages is the REAL CRISIS.

Drought Hits Mighty Mississippi

As if high temperatures, wildfires, and dried up crops weren't enough, the drought plaguing the US is now crippling the nation's largest river.

The Mississippi River is one of the nation's main arteries of commerce. More than 500 tons of grain, coal, and other goods pass along its banks every year. With water levels on the Mississippi so low, barges are having trouble getting through creating delays in shipping crucial goods can costing hundreds of millions a day.

The drought of 2012 is shrinking the river. In some places, it's been reduced to half its size. The Army Corp of Engineers is struggling to keep water levels at nine feet, the legal level to keep the Mississippi open for traffic. River levels haven't been this low since the late 1980s, and they're getting dangerously close to breaking the all-time low record.

In one stretch of the Mississippi, several barges got stuck. The situation prompted the U.S. Coast Guard to close an 11-mile section of the river, stranding 97 boats and barges. Dredge operators are hard at work trying to make the water deep enough for the barges to pass through. Barges carrying lighter loads to help navigate the shallow waters. But the less they carry, the more consumers pay. More than 400,000 jobs depend on the flow of traffic in the Mississippi River.

If the Mississippi is forced to close, it will cost the U.S. economy $300 million a day and food prices will soar. Corn and soybean prices are at record highs. The price of corn is up 68 percent from June and soybean prices are up 39 percent.

Drought 2013 Means Higher Grocery Bill In 2013

The U.S. Department of Agriculture warned Thursday that this year's drought will likely cause higher grocery bills in 2013.

The Department said consumers should expect to pay 3 to 4 percent more on meat, dairy, and bakery products.

Farmers have already been forced to raise their prices.

"We're not trying to rip you off. It's just we're trying to make a living," Michigan farmer Ethan Klug said.

"We used to get probably close to 30 to 40 dozen eggs a week, and we're getting about 7 to 8 dozen eggs right now because of the heat," added Armand Bechard, owner of the Bechard Family Farm.

Agriculture Secretary Tom Vilsack said the federal government will provide the assistance it can.

But he said the most important thing is to "pray for rain."

Mississippi River: 11 Miles Shut Down

Nearly 100 boats and barges were waiting for passage on Monday along an 11-mile stretch of the Mississippi River that has been closed due to low water levels. 

The stretch of of river near Greenville has been open only intermittently a vessel ran aground on August 11th. The area is being surveyed for dredging and a Coast Guard boat is replacing eight navigation markers. There at least 40 northbound vessels and nearly 60 southbound vessels stranded, waiting for passage as of Monday.

The Army Corps of Engineers has been dredging to keep a lane 9 feet deep and 300 feet wide open.

It's not immediately clear when the river will re-open. A stretch of river near Greenville was also closed in 1988 due to low water levels caused by severe drought. The river hit a record low on the Memphis gauge that year. 

The Mississippi River from Illinois to Louisiana has seen water levels plummet due to drought conditions in the past three months. Near Memphis, the river level was more than 12 feet lower than normal for this time of year.

With thousands of tons of materials shipped on the river each day, maintaining the navigation channel is essential to keeping vessels from colliding or running aground.

Drought 2012 Costs Crop Insurers $5 Billion

Private crop insurers may face losses exceeding $5 billion if this year’s U.S. drought is worse than one in 1988, according to Standard & Poor’s.

Hot, dry weather across much of the Midwest has damaged crops, led to a rally in corn and soybean futures, and boosted insurance loss estimates. The U.S. subsidizes farmers’ premiums for so-called multiperil coverage, which protects against a loss of revenue or production as a result of drought, hail, wind, frost or other natural causes. Private insurers sell and administer the coverage in the U.S. In return, the federal government backstops the firms with payments and reinsurance.

Losses among crop insurers will vary depending on how much government and private reinsurance they use, S&P said. The companies can withstand the losses because of capital levels and revenue from other businesses, according to the ratings firm.

American Financial Group Inc., which sells crop insurance along with property, casualty and supplemental health protection, last month reduced its earnings projection for the year, saying the drought will weigh on results.

Soybeans climbed to an all-time high today, and corn reached a record $8.49 a bushel on Aug. 10 on the Chicago Board of Trade. The Department of Agriculture has slashed its corn harvest forecast by 27 percent since June, after declaring more than half of U.S. counties as disaster areas amid drought conditions that stretched from California to New York.

Losses this year may rival costs from the 1988 drought and a 1993 flood, Tom Zacharias, the president of National Crop Insurance Services, an industry group, said last month.

Federal crop insurance dates to the Dust Bowl droughts of the 1930s. The program and subsidies were boosted in 2000 as lawmakers sought to use it as a way to avoid what by the 1980s had become near-annual disaster payouts.