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KS: Drought threatens to wilt state economy

By   /   July 10, 2012  /   No Comments

By Gene Meyer | Kansas Reporter

The excessive heat in Kansas threatens this year’s harvest of the state’s second largest crop.

FAIRWAY —  Kansas’ second biggest grain crop — corn — is headed for big trouble this year.

Corn here and in many other parts of the central United States needs mild weather and timely rain to pollinate and produce the one grain America uses most to feed livestock, fuel cars with ethanol, sell overseas and manufacture products as widely different as aspirin and soda pop.

But instead “it’s hot and it’s dry,” said Gerald Franklin, who raises corn and wheat nine miles southeast of Goodland in northwestern Kansas.

“We’ve had 16 days of temperatures above 100 and some with 110 degrees and 35-40 miles per hour winds,” Franklin said.

Midwestern field corn typically needs one-half to three-fourths an inch of rain daily to thrive during its critical tasseling and pollination stage, when pollen from the corn plant’s tassel starts becoming ears of corn.

Barely 4 inches of rain have fallen on Franklin’s land since January. One of those inches came two nights ago, too late to revive some of the crop in his driest fields.

Corn tries to grow, Franklin said, but in these conditions, “it’s just cooking the pollen. You’ll never get corn from there.”

Federal and state crop watchers  rate 43 percent of what’s growing now as being in poor or very poor condition, like Franklin’s. That’s their most pessimistic early July assessment in decades. Poor and very poor are definitions the U.S. Department of Agriculture uses to measure potential crop reduction.

Nationally, 30 percent of the corn in the nation’s top 18 producing states, including Kansas, is in poor or very poor condition, up from 22 percent a week ago, the USDA said Monday.

“It’s a big deal,” said Bill Helming, an economist, agricultural business consultant and forecaster in Olathe.

Corn is the primary grain used to feed livestock, which in Kansas sells for five times more than the state’s more famous wheat crop, according to the Kansas Department of Agriculture.

“Our big concern is how much these high temperatures are going to knock livestock producers’ budgets out of whack,” said Mark Nelson, Kansas Farm Bureau’s commodities division director. “Paying twice as much for corn than we planned can really hurt.”

As a result, meat, milk and egg prices are moved by the price and availability of corn, Helming said.

Fuel prices are affected too, because 40 percent of the U.S. crop is used to make motor fuel ethanol.

U.S. trade balances will be affected as well; another 20 percent of the crop is exported.

U.S. farmers last spring planted 96 million acres of corn, the most since 1937, to feed those different demands. Those fields in normal years would have produced more than 14 billion bushels nationally, beating the previous national record by at least 2.5 billion bushels.

“Now, all we know is that the crop will be significantly less than that, which will be very disruptive,” Helming said.

The drought causing that expected disruption is the widest the U.S. has seen since the Dust Bowl days of the 1930s, Helming said. USDA’s Drought Monitor shows that 72 percent of the entire continental U.S. was abnormally dry, and 52 percent was under moderate or worse drought conditions.

Drawing a parallel to the Dust Bowl days is potentially chilling, because U.S. unemployment then was persistently high as the nation worked its excruciatingly slow way out of the Great Depression.

The current drought could cost people jobs as well, if, for instance, high corn prices caused ethanol producers to close their factories, Helming said.

Valero Energy Corp. recently closed two of its plants in Nebraska and Indiana, temporarily, the company said, because high corn prices made production unprofitable.

But unless USDA discloses far larger crop losses than anyone expects when it reports the nation’s final production estimates after the harvest, “this is not a disaster yet, but it is causing problems,” Helming said.

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Gene Meyer