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Wet spring delays Midwest farmers, but corn prices could increase

Thursday, May 14, 2009 | 10:54 a.m. CDT

CHAMPAIGN, Ill. — In an average year, southwestern Illinois farmer Richard Borgsmiller would have his 300-acre corn crop in the ground. This isn't an average year.

Like many farmers across the eastern Corn Belt, Borgsmiller has not even started planting because of the wet spring. He's stuck waiting for a rain-free window long enough to dry out his land near Murphysboro — about 90 miles southeast of St. Louis — and to make it worth cranking up his tons of planting equipment.

"We've got a 50 percent chance of rain tonight and tomorrow," Borgsmiller shrugged Tuesday, hoping he might get some planting in next week.

Farmers from eastern Missouri across Illinois and Indiana and into Ohio are telling similar stories, which have economists and investors starting to expect a curtailed crop. The result could be higher corn prices that could eventually be reflected on grocery store shelves.

The wet spring has slowed planting across a region that accounts for somewhere between a quarter and a third of the country's corn crop. In Illinois, 10 percent of the expected crop has been planted at a time when more than 80 percent typically would be in the ground, according to the U.S. Department of Agriculture.

Indiana has 11 percent of its crop planted rather than the usual 70 percent; Missouri's statewide figure is 39 percent, compared to 75 percent. Ohio farmers have planted just less than a quarter of their corn, rather than the usual two-thirds by early May.

North Dakota isn't a part of the Corn Belt, but production has increased in recent years. This spring, only about 7 percent of the crop is in the ground, compared to 57 percent on average. Some farmers are still trying to finish up last fall's corn harvest, which was cut short by early snow.

Planting delays can cut production because crops aren't mature enough to benefit from the early July heat they need to grow. Prices can rise as a result.

Corn futures prices have been increasing since wet weather set in late April, running up to about $4.50 a bushel Tuesday on the Chicago Board of Trade, an increase of more than 10 percent.

While that's good news for corn farmers who get their crops in the ground soon, it could also mean consumer price increases similar to those that rippled through the food chain last year, said Bruce Babcock, an agricultural economist at Iowa State University.

Last year, high oil prices drove demand for ethanol that contributed to higher corn prices — over $7 a bushel, a previously unheard-of level. That in turn drove up the cost of food products that rely on corn, as well as animal feed, which fueled higher dairy and meat prices.

"Yes, we could see another price spike," Babcock said. "We don't have oil at $140 a barrel, so maybe not to the extent as last year, but we are seeing a big rally."

Farmers in some Corn Belt states, like Iowa and Minnesota, have seen a near-perfect planting season, Babcock said, and are almost finished with corn planting. But from southwestern Illinois, where Borgsmiller farms, across the eastern Corn Belt, wet weather has been the rule this spring.

"Just these fronts coming through dropping rain often enough, so it never gets very dried up between times," said Emerson Nafziger, a University of Illinois crop expert.

By mid-May, Nafziger said, farmers are impatient and fight the temptation to head into muddy fields too early. Corn planted in those conditions isn't typically as strong or productive as it should be.

In Thorntown, Ind., about 35 miles northwest of Indianapolis, Donnie Lawson said Tuesday that he and his brother, Danny, had just started planting the roughly 1,100 acres of corn they plan this spring.

"We usually are pretty much wrapping it up in this time period," the 46-year-old said. "If we could get good weather, probably another seven to 10 days and we could be done. But they're talking rain tomorrow, so ... "

Prices may be rising in anticipation of farmers like Lawson having a bad year, but he said he doesn't spend a lot of time worrying about it.

"You can get all wrapped up in it and just eat yourself up in it; guys that are just wringing their hands and pacing back and forth and just worrying, worrying, worrying," Lawson said. "There's times that I do that. Then I just remind myself that I can't control it."

Associated Press writer Jim Suhr in St. Louis contributed to this report.

 


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