Corn tech limited drought losses

Des Moines Iowa AP, BLOOMBERG

The federal government on Friday released its final crop report for 2012, detailing heavy losses caused by the worst drought the U.S. has experienced since the 1950s.

Much of the attention focused on corn, which is widely used as an ingredient in many foods and as feed for livestock. Farmers produced less than three-fourths of the corn the U.S. Department of Agriculture (USDA) anticipated when planting was done in the spring. The yearend report shows a harvest of nearly 10.8 billion bushels, 27 percent less than the agency’s initial estimate of 14.8 billion bushels. A bushel of corn equals 56 pounds, or 25.4 kg.

The harvest, however, was still one of the largest in U.S. history. Farmers say better crop technology that improved the ability of corn to withstand drought saved them from more devastating losses, and production was helped by the large amount of land planted last year.

The USDA closed the year by saying farmers planted 97.2 million acres (39.4 million hectares) of corn, the most since 1937. Farmers have been planting more corn as demand has risen with ethanol production. Just a decade ago, fewer than 80 million acres (32 million hectares) were planted in corn.

While the drought eventually spread to cover two-thirds of the nation, its impact varied widely from one region of the corn belt to another. Some Iowa farmers saw decent results, while those in parts of Illinois and Indiana could only watch as plants withered and died after months of drought.

The USDA had predicted a record average yield of 166 bushels per acre of corn when warm weather got farmers in the fields early. But the government began scaling back estimates as the drought spread across two-thirds of the nation.

Farmers may have reason to be nervous about prospects this spring when they hit the fields to plant again. The U.S. Drought Monitor’s weekly updates have shown few signs the drought is relenting. Sixty percent of the continental U.S. is still in some form of drought, and climatologists say it will take an absurd amount of snow for conditions to change much over the winter. The best hope, they say, is for heavy spring rains.

Until then, winter rain apparently will keep water levels high enough to avert a shutdown of barge traffic along a choke point on the Mississippi River before the water begins a seasonal rise in February, the U.S. Army Corps of Engineers says. The Corps may also release water from reservoirs farther north on the Mississippi should rain be less than expected. The drought makes historical patterns a less reliable predictor of future flows.

The Mississippi in a typical January carries as much as $2.8 billion in cargo, including grain, coal and crude oil.

The Mississippi has dropped to about half its normal level for early January, according to data from the Corps.