Nation & World

Despite challenging conditions, some farmers still will come out ahead this year: economist

Saving a respectable harvest out of 'war zone'

Bloomberg

Water sits near corn plants growing in an agricultural field in Malden, Ill., in late May.
Bloomberg Water sits near corn plants growing in an agricultural field in Malden, Ill., in late May.

From space, the U.S. Midwest is more brown belt than farm belt right now.

At this time of year, a band of deep kelly green should spread from Ohio to North Dakota as corn and soybeans race to pack on size before they pollinate and bear fruit. But 2019’s unprecedented rains have uprooted the typical course of events.

Some crops are waterlogged and stunted. Others won’t be planted at all.

Unplanted, drowned or late fields have two things in common: They look brown from space, and they mean farmers will probably harvest less corn and soybeans this year than they had planned.

Some farms were devastated by the deluge, particularly smaller family operations that lacked insurance coverage and those that were washed out by flooded rivers.

But thanks to a recovery in commodity prices and what University of Illinois economist Scott Irwin estimated will be a $20 billion infusion of federal money, those that are not knocked out by this perilous planting season are likely to come out of the disaster ahead.

As seeds begin to germinate and emerge, corn and soybeans are further behind than they’ve ever been at this point in the year, according to about four decades of data from the Agriculture Department.

For corn, planting is effectively over and the die has been cast, although we won’t know the results until late fall.

Soybean acres are not likely to be fully planted, either — the end of the planting window is unofficially considered to be July 4.

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Now, beleaguered farmers will attempt to wring a respectable harvest out of fields Irwin likened to a “war zone for growing corn and soybeans.”

“Everything that could go right went perfect for growing corn and soybeans last year,” he said. “This year has been pretty much the opposite. So far, everything that can go wrong has gone wrong.”

Planting totals are creeping higher, but many fields were planted in suboptimal conditions and farmers will be dealing with the fallout until harvest time.

The extraordinary circumstances have scrambled U.S. Department of Agriculture data and made reliable statistics scarce, according to Todd Hultman, a market analyst with the data firm DTN.

Hultman expects farmers across the Midwest to plant millions fewer acres of corn than initially predicted and said a large but unknown number have been forced to exercise a crop insurance provision that allows them to take a limited payout if they were unable to plant certain acres.

Farmers still may plant cover crops in those acres to improve the soil, block weeds and earn extra income.

The production squeeze from the lower acreage will be multiplied by what Kevin McNew, chief economist at Farmer’s Business Network, estimates will be a 10 percent drop in production per acre, thanks to the season’s miserable start.

Irwin said: “What corn got planted in June, a lot of it was in terrible conditions. They normally never would have planted corn in ground that was that wet.”

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Soybeans are highly sensitive to late planting, according to Ohio State University’s Laura Lindsey, a soybean specialist who tests crop yields and advises farmers through the school’s agricultural extension program.

With each day of delay after May 1, farmers’ likely harvest ticks downward. And starting in mid-June, they begin to accrue late-planting penalties from crop insurance providers, which reduces their final coverage. These incremental losses can make or break farms.

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