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Published: 7/22/2012 - Updated: 1 year ago

Area drought likely to rank among worst

Crop damage to show up later in higher food prices

BY TYREL LINKHORN
BLADE BUSINESS WRITER
The dry, hot summer has taken a heavy toll on corn in a field along North Fostoria Road near Woodville, Ohio. The dry, hot summer has taken a heavy toll on corn in a field along North Fostoria Road near Woodville, Ohio.
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Mark Drewes has never seen it drier in Henry County.

The 51-year-old farmer from Custar, Ohio, sows corn in Wood, Putnam, Henry, and Hancock counties. Some of his fields are doing better than others, but it's all dry.

"[Conditions] are pretty tough," he said. "We've been below normal rainfall for seven months straight now, and it's reached the point of being almost beyond critical. The crop has irreversible damage."

Two months of hot, arid conditions have devastated fields across much of the United States, leaving many farmers watching both their crops and their profits dry up.

Climatologists say this summer's drought, now covering more than half the United States, is the most widespread since 1956.

And it's likely to get worse.

"I think we're still developing, we're intensifying and spreading," climatologist Brian Fuchs said. "Until we kind of see a peak in it and start seeing some improvement, it's tough to say where this one will rank. It has the potential of being a very bad drought and the drought of memory for many people."

Mr. Fuchs, who works at the National Drought Mitigation Center in Lincoln, Neb., said forecasters expect the hot, dry conditions to persist for the next several months.

High temperatures

A dry summer and ongoing drought have dropped the water level in the Sandusky River at Fremont. A dry summer and ongoing drought have dropped the water level in the Sandusky River at Fremont.
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Record-setting triple-digit temperatures have already occurred across the country. The National Weather Service counted 86 records last month, including 118 degrees in Norton, Kan., on June 28. Other record highs included 111 degrees in Yuma, Colo., 106 degrees in St. Louis, and 105 in Logan, W. Va.

July has brought no relief. Toledo had three 100-degree days this month. Evansville, Ind., has had nine days over 100 degrees, including a reading of 107 on July 5.

Between that extreme heat and the lack of rain, crop conditions are dismal across much of the corn belt.

This month, the U.S. Department of Agriculture cut its corn yield projection 12 percent to 146 bushels per acre. That works out to total reduction of 1.8 billion bushels, and many experts expect projections to be cut again.

In its most recent crop progress report, the department said 72 percent of the corn crop in Missouri and 71 percent of the crop in Indiana was poor to very poor. Indiana ranked fifth in the nation in corn production last year.

Michigan had 56 percent ranked poor or very poor, and Ohio had 47 percent ranked poor or very poor.

Pennsylvania's crop is faring considerably better, at just 16 percent poor or very poor, but the state ranks much lower in annual corn production.

Higher prices

Less grain means higher prices for feed lots, dairy operations, and producers of processed food.

Eventually, that's going to show up in the supermarket -- although it won't be immediate and may be to a lesser extent than some expect.

"People need to understand there's so many other factors that drive the prices we see at the supermarket," said Ricky Volpe an economist with the U.S. Department of Agriculture. "There's labor, overhead, advertising, transportation -- and a lot of these factors are even more important in the restaurant industry."

Out of every dollar consumers spend on food, only about 14 cents goes back to the farm.

"It's not nothing, it's not insignificant, but it's smaller than a lot of people might think," Mr. Volpe said.

Still, as the drought drags on, prices are likely to go up for meats, eggs, dairy products, vegetable oils, and processed foods that include corn or other grains.

Economists say they can't predict the exact effect until they know how much of this year's corn crop -- previously expected to be the largest on record -- is lost.

"It's all anecdotal at this point, and farmers tend to be pretty conservative," said Tadd Nicholson, executive director of the Ohio Corn and Wheat Growers Association. "There's no doubt it's going to be a down year, but the degree … won't really be answered until we get into the field for the harvest."

Most economists said the first price jumps consumers should expect to see will be in poultry, pork, and dairy products.

Beef prices will rise later, followed by packaged items such as cereals, flour, and processed foods that include corn-based sweeteners.

Chris Hurt, an agricultural economist at Purdue University, said many of those processed foods contain such a small percentage of corn that consumers shouldn't see large price increases.

For example, Mr. Hurt said corn makes up only about 5 percent of the total cost of a $3 box of corn flakes. If corn doubled in price, that would raise the consumer cost by about 15 cents a box, he said.

Impact on meats

The increases are likely to be most noticeable in meats.

Corn makes up about 95 percent of the feed grains in the United States, and with most pasture fields dry as well, meat farmers don't have many other options.

"Essentially anybody with animals has got a problem here," said James Dunn, an agricultural economist at Pennsylvania State University.

Beef prices were already higher than usual. Ongoing high feed prices and last year's extreme drought in the Southwest led to a significant thinning of herds and breeding stock. Prices rose 10 percent last year and have been creeping up this year as well -- completely unrelated to the current drought.

Because replenishing herds takes time, Mr. Hurt said he expects records to be set in retail prices for quite a long period.

"We're now at least 2016 before we can begin to talk about getting more beef to consumers and hopefully bringing prices down or at least moderating them. That's a long horizon," he said. "The beef is where the impacts of this drought will drag out the longest."

Mr. Drewes, the Wood County farmer, said he sells about one-third of his corn to a dairy operation, another third to ethanol production, and the final third to the southeast United States for feed. He estimated the drought will decrease his yield 45 to 50 percent.

The prices farmers get for their corn will rise as the supply falls, but Mr. Drewes said higher prices on what he does sell won't offset what he lost.

"The offset prices versus yields, it's not enough to cover our losses. It's a bad scenario for everybody. When our yields are affected, it's tough on all our end users and ourselves," he said.

"The main thing is, we will have enough corn in this country to satisfy all needs from our ethanol industry to our livestock industry."

Expanding drought

To this point, eastern states including Pennsylvania have escaped much of the drought. However, forecasters say that as the drought expands eastward, they too will suffer.

"These areas that have been on the fringe, hopefully can get through their growing seasons, but it does look like drought is going to spread in the next several months," Mr. Fuchs said.

The National Weather Service is forecasting above-normal temperatures through October for two-thirds of the country, including Ohio and its neighboring states. The Weather Service also expects below-normal precipitation.

"There's not a good likelihood for a relief in the coming months," said Dan Collins, a research meteorologist with the National Oceanic and Atmospheric Administration.

What rain has fallen this summer has been sporadic. Through Thursday, Toledo's year-to-date rainfall was about 3 inches below normal. Dayton, however, was 9 inches below normal. Year-to-date rainfall in Evansville, Ind., was nearly 13 inches below normal. Pittsburgh was down about 1.7 inches.

Water tables typically drop during summer, with more people washing cars, watering lawns and gardens, and filling swimming pools, but so far Mr. Fuchs hasn't heard of any widespread issues related to groundwater supply. He did say there could be some issues in areas with older, shallower wells. If the drought continues longer, groundwater supplies could be more of a concern, he said.

Local water supply

Jon Gochenour, administrator for the village of Swanton, which during the drought of 1988 banned lawn watering and hired drillers to find more underground water in the area, said village officials have been closely monitoring water levels at the 400 million-gallon Swanton Reservoir, which is fed by Swan Creek.

The village maintains two wells near its water plant and has had to use them to supplement water from the reservoir to maintain village water levels, Mr. Gochenour said.

"We've basically been using our wells for the last couple of months. There is basically no flow in Swan Creek because of the drought," he added.

Last year, Mr. Gochenour suggested, and received approval for, a 12-inch waterline that, in drought emergencies, would let the village tap into the line between Toledo and the Worthington Steel plant in nearby Delta.

"I had recommended that they needed some kind of emergency water supply system, and during the arguments, everyone mentioned the drought in the late '80s," Mr. Gochenour said.

Work on the emergency waterline, which will cost $180,000, was to begin later this summer. "This was something we felt we needed to do and everybody was in favor of it," Mr. Gochenour said.

Staff writer Jon Chavez contributed to this report.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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