Crop Weather Mayhem Delays U.S. Corn, Rice Planting as Prices Extend Gains
When the overflowing Mississippi River breached Arkansas’s levees and flooded Michael Oxner’s farm in May, the waters didn’t just wipe out his hopes of planting 1,400 acres of rice. It destroyed last year’s crop, too. Water inundated the bins that held the rice he’d harvested in 2010, ruining 25,000 bushels and leaving a fermented smell that turned his remaining grain into pet food.
Oxner lost $375,000 in 2010 rice alone. His rice land, along with 300 acres planted with corn, won’t be usable this season, Bloomberg Businessweek reports in its June 13 issue. Since it’s too late to plant more corn, the 2,000 acres he has left will go into soybeans, which grow faster than other crops but fetch less on the market. Even with soybeans, Oxner is cutting it close: Soybeans usually go into the fields in May. This year’s planting started on June 4.
“I won’t know how bad it will be until fall,” he said.
Oxner’s ordeal is being repeated all across Arkansas, the prime U.S. rice-growing state, where 600,000 acres remain under water one month after flooding began. Nationwide, a spring of weather extremes means that summer has to be almost perfect if the U.S. is to meet global demand for its grain.
More bad weather could push corn, the most-valuable U.S. crop in monetary terms, to $9 a bushel, according to Hussein Allidina, the head of commodity research at Morgan Stanley. That would beat the record set in 2008 of almost $8. Corn futures for July delivery closed yesterday at $7.855 on the Chicago Board of Trade, up 7.3 percent in three days.
Rice futures for July delivery advanced to $14.94 per 100 pound on the CBOT, capping a four-day rally to the highest price this month.
Damaged Crops
The U.S. Army Corps of Engineers estimates floods have damaged as much as 6.8 million acres across the South and Midwest, an area the size of Massachusetts. Farmland in other areas is parched, with drought withering wheat and cotton in the southern Great Plains.
Much of Texas, western Oklahoma, southern Kansas and eastern Colorado have received less than half the normal amount of rainfall in the past 60 days, according to the National Weather Service. About 44 percent of winter-wheat fields, which are planted in fall and harvested in June, were in poor condition or worse as of June 5. Ohio’s corn crop as of that day was 58 percent planted, the least for the week since 1989. North Dakota’s spring-wheat crop was 69 percent planted, the slowest pace since 1981.
Fewer Acres Planted
The price of corn on the CBOT has more than doubled in the past 12 months because of record purchases by ethanol producers and rising demand from livestock farmers. Only 87.2 million acres may be planted with corn this summer, rather than the 92.2 million the U.S. Department of Agriculture forecast before the flooding, according to the Linn Group, an agricultural researcher in Chicago.
A 5.4 percent drop may not seem like much. With supplies short, though, “we just can’t afford to have weather issues, and we’ve already had quite a few,” says Dave Smoldt, a vice- president in West Des Moines for INTL FCStone, a New York-based commodity-trading and advisory firm.
U.S. farmers are working to salvage what land they can before it becomes impossible to plant early enough to ensure a fall harvest.
“As soon as that ground comes out of water, they’re getting to it as soon as equipment can get on it,” says Lee Maddox, spokesman for Tennessee’s Farm Bureau Federation. In general, if planting hasn’t been done by late June, there’s no fall crop.
Many farmers are still waiting to plant. Oxner’s land was submerged for three weeks in May, and it’s still more than half- covered. The near-perfect summer he will need for a good harvest seems a long way off.
“We’re just trying to get started,” Oxner says. “Every day you can’t, that’s less you’re going to grow.”
To contact the reporters on this story: Alan Bjerga in Washington at abjerga@bloomberg.net; Whitney McFerron in Chicago at wmcferron1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
More News:
- Canada ·
- Latin America ·
- U.S. ·
- Commodities
Rate this Page