Western Tennessee Farmers Prosper As Crop Losses Mount Elsewhere From Floods

By Jane Roberts, The Commercial Appeal, Memphis, Tenn.

Jul. 1–For a nation groaning under the cost of groceries and fuel, the size of weather-related crop losses this spring is just another ominous sign.

Monday, the government confirmed for the first time that 2.8 million acres of corn and soybeans were flooded out or lost in the cold, damp June in the upper Corn Belt.

For the Mid-South, where the best-looking crops in the nation are thriving under adequate rain and sunshine, the report is, frankly, another positive in a year that looks so good farmers can barely believe their fortune.

“We have one of the best potential crops coming up we’ve had in long time,” said John Charles Wilson, head of Agricenter International.

He flew to East Tennessee last week and said that from the air it’s easy to see how lush and green West Tennessee looks compared to East Tennessee, already brown and drying.

“Here we are in the first week of July and the forecast for the next three or four days is in the high 80s. It’s unbelievable,” he said.

As much as 1.2 million acres of corn and 1.7 million acres of soybeans are considered lost, based on interviews U.S. Department of Agriculture officials conducted with farmers in June, including 1,200 who were re-interviewed after the flooding.

The government rarely resurveys farmers for its monthly acres harvested report. That it did this time provided the freshest information on the outlook in the Midwest, where the bulk of the nation’s grain crop is grown.

The price of corn, which hit a record high last week, fell the limit on the Chicago Board of Trade because the estimates were better than expected. Weekend forecasts for drier weather in much of the nation’s corn-growing region were also viewed as optimistic for corn, analysts said.

Beans rose precipitously, signaling that prices for much of what is served on the world’s table will continue to rise, perhaps putting more pressure on the government to reduce ethanol-use projections outlined in the 2007 Energy Act.

“Corn, gasoline, wheat, groceries, these things are all tied together in one shape or form,” said Darin Newsom at DTN in Omaha.

He expects no relief in the price of bread, meat and just about any other food, including produce, that has to be transported.

The big question now is how well the remaining acres will yield. A blockbuster harvest in the Midwest could take the sting out.

Monday, Wilson booked September corn from the Agricenter’s plots for $7.11 a bushel, “the most I’ve ever gotten for corn,” he said.

The telling detail is that he booked 50 bushels per acre when average ranges from 150 to 215 bushels.

The Mid-South went into the winter 25 inches below annual rainfall.

While the difference has been more than made up, farmers are well aware that anything can happen in July, the most important month for pollination and lately, a drought-streaked month rife with anxiety and irrigation costs.

“We still have a long way to go,” Newsom said. “A lot will still have to play out for this crop. We’ll wait and see.”

In May, USDA estimated the nation’s farmers would harvest 73.8 million acres of soybeans. Monday, it said the figure would be closer to 72.1 million. While the figure is up 15 percent from last year, it is not enough to boost the world supply of beans, which is already tight, said Richard Brock, president of Brock Associates, publisher of the weekly Brock Report.

“The government is assuming a lot of beans that got planted aren’t going to be harvested,” he said.

Worries that the world will not produce enough corn and soybeans are real, experts say, playing havoc on the Energy Act of 2007′s ethanol production schedule.

In late April, Texas Gov. Rick Perry asked the Environmental Protection Agency to waive half of the renewal fuel standard for ethanol made from grain, saying it was “the best, quickest way” to ease rising food costs before lasting damage was done.

Fifty Republican congressional leaders, plus the Grocery Manufacturing Association and several livestock and poultry producing groups, have joined him.

The energy act stipulates that the United States produce 9 million gallons of ethanol this year.

“My expectation is that the information USDA released today will probably make the government less likely to issue the waiver,” said Jim Allwood, senior vice president at Memphis-based Informa Inc. and head of the company’s energy division.

“That’s because the corn acreage turned out to be larger than expected.”

The EPA will rule this month.

July beans closed Monday at $16.05; November beans were $15.74.

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