Watching profits evaporate as summer drought burns through crops
The first thing you notice is the hay. Stacks and stacks of it. Big cylindrical bales, each weighing more than 1,000 pounds arranged in pyramids and off-kilter stacks waiting to be unloaded from trucks. It is bought hay, relatively low quality feed cut too late in the season to be worth too much most years.
For John Busch, this year the hay is worth everything — or at least the cost of his cattle. Busch has a herd of 80 cows, 24 heifers, and some calves. Usually the cattle pass the summer grazing across fescue pastures and watering at ponds and creeks scattered around Busch's property. This summer is different. The fescue is burned up and the ground beneath it cracked with lack of rain. Creeks are dry and ponds feet below where they should be and it is only late July and Busch has been feeding since June, five months ahead of schedule.
"The rain didn't even wake it up," Busch says as he walks through stunted brown pastures rendered dormant by heat and lack of rain. It is no wonder. On this past Friday in one of the least hospitable Julys on record, Busch farms had seen rain only once in nearly six weeks. For most the conditions are unpleasant, but for farmers like Busch, who rely on rain to irrigate not only their pastures but corn, soy beans and other cash crops, the drought is a vital threat.
Across Missouri farm country this summer, stunted corn, pea-less soy bean pods, and earth-colored fields have become the new, hopefully temporary, normal. About 50 miles southwest of St. Louis, farms like Busch's in and around Union are no exception. Record-breaking temperatures in June and July and severe drought conditions across the nation's corn and soy belt are taking their toll on an industry that cannot much afford to be tested.
The Missouri crop progress report from the National Agriculture Statistics Service (NASS) issued Monday, July 30, shows that 83 percent of the state's corn crop and 72 percent of the soy bean crop are in either poor or very poor condition. Though experts are hesitant to estimate yield loses with harvest still months away, many are comfortable saying the summer of 2012 will go down as one of the worst in memory.
Running out of time
John Busch farms a few hundred acres northeast of Union, Mo., that he inherited form his father. He lives in the same white clapboard house where he was born, and the road that runs from State Highway V to his property bears the family name. Little has changed in his 71 years. His living is primarily farming row crops, as his father did, growing corn and soy beans — about 200 acres each. Tack on some winter wheat, hay, a kitchen vegetable garden, 100 or so cattle, and seed sales and you have a livelihood.
As it did to most farmers, the start of the 2012 growing season seemed promising to Busch. He planted two weeks ahead of schedule, harvested his hay early, and several new calves were born into his herd. Heading into the end of spring and early summer, he remained optimistic.
"It had a perfect start," Busch says, trailing off. The pasture he stands in makes clear conditions did not last.
A dry, early spring allowed farmers to get into their fields weeks ahead of schedule and plant near-record acreage. Missouri farmers planted roughly 3.6 million acres of corn, 5.3 million acres of soy beans, 770,000 acres of winter wheat, and 3.64 million acres of hay in 2012, according to estimates by the USDA — which would have equaled bumper harvests in good conditions.
But the factors that had farmers imagining a windfall harvest quickly turned. Dry weather became an early summer drought that experts say is on par with 1988, 1980, and even 1954, the summer most crops died. The warmth escalating into record breaking heat.
Busch and others say they have heard of farmers simply giving up, cutting their corn and soy beans for silage to feed livestock. Busch does not think he is in that bad of shape, but yields do not seem promising. Bending over a row of soy, he sees flowers and pods, but not nearly as many as there should be. One pod he picks and then splits contains no beans.
The outlook for soy beans is better than that of corn, he says. While corn underwent pollination a few weeks ago when temperatures seemed stuck above 100 degrees, soy is still flowering and with the right condition, may produce a reasonable yield. Though looks can be deceiving when it comes to agriculture, dead brown cornstalks are straightforward, as are shriveled ears of corn.
"The corn is done. We'll get what we get. The beans — there could still be the possibility of getting more pods if we get rain, but we're running out of time,"Busch says.
Watching profits evaporate
Corn is not generally harvested until September and soy not until October, which means farmers and commodities traders will not know just how bad things are until well into the fall. That uncertainty has led traders to push commodity prices higher. Corn and soybean futures each rose 2 percent on Monday, to $8.12 and $16.47 a bushel respectively. Those high prices, while slightly lower than record highs set earlier in the summer, will likely ripple through the food system in the coming months and years, driving up cost.
For farmers who are able to eke out a yield, high prices may be a saving grace. For others, crop insurance may be the only way to recoup their losses.
"Eight dollar corn sounds real good, but if you don't have any to sell it don't do you no good," Busch says. He has crop insurance, and will likely use it come this fall to recover what he lost, but this will not be a profitable year.
The drought is not the first Busch has made it through. He remembers 1954, 1980 and 1988 — how hot and dry it was — but he says none of those years was as bad as this.
"You'd almost have to have seed that could grow in gravel to withstand something like this," he says from the shade of his yard. If he was younger, he thinks, with more debt and less experience behind him, things would probably be worse, but age and technology are on his side.
Older, smaller, less debt
Busch's story is a common one unfolding across Missouri. As the median age of a farmer in the state creeps higher (it was 57 in 2010) and Missouri continues to lag behind the rest of the country in farm consolidation, he is part of a majority of aging smaller producers who may be better positioned to weather the drought.
In the state, 95,981 of 108,000 farms have sales totaling under $100,000, according to a 2010 report by the USDA. At the same time the average Missouri farm is significantly smaller than the national average: roughly 287 acres compared to 441 nationally, a 2007 agricultural census showed.
Better established and more likely to have crop insurance, older farmers with fewer acres are also more likely to be free of debt, something Busch and Franklin County extension agronomist Matthew Herring say is beneficial. The advantages are just that, though, advantages. They make the drought a little easier to stomach, but they do not make it go away.
"When you get to be my age, you just go on," Busch says, adding later, "No doubt it's probably going to break some farmers, especially some younger ones."
Busch has seen the transition from horse drawn plows and pickers to more efficient machines. He has seen the rise of soy beans as a cash crop and the rise of genetic engineering. In 1950, he says, 70 bushels of corn an acre was a respectable yield. Today, that figure is more like 150 bushels. While his five sons help him maintain the farm part time, Busch still handles most of the work himself.
"I guess Mother Nature is the ruler in this kind of year," Busch says. He stares ahead absently, maybe at stacks of hay.
Coming next: Will drought cause farmers to sell off herds?