Drought '99 Ohio State University Extension Drought's Income Effects Depend on Region September 16, 1999 By Steve Zolvinski Sources: Carl Zulauf (614) 292-6285 Allan Lines (614) 292-5926 Peter Thomison (614) 292-2373 Jim Beuerlein (614) 292-9080 Ed Vollborn (740) 286-2177 COLUMBUS, Ohio -- With drought conditions as a backdrop, the 1999 cropping season was a year that Ohio farmers may want to forget, or else cherish, depending on where they live in the state. Ohio State University agricultural economists and crop specialists agree that some fields in northern parts of the state could hit maximum yields. But farmers in southern areas will definitely swallow a bitter pill where an extreme moisture deficit may put per-acre corn yields in the low double digits. Even though growing conditions tended to be more favorable in northwestern Ohio, that area saw a late-season dry spell that could have limited yield potential, said Ohio State corn specialist Peter Thomison. The extent of the effect depended on the growth stage of the crop relative to grain fill, he said. Corn that was further along probably wasn't hurt as much as the crop in earlier development stages. The latest crop production report from the U.S. Department of Agriculture estimates a 125-bushel-per-acre corn yield for Ohio, compared to 141 bushels per acre last year. Soybeans are estimated to yield 39 bushels per acre compared to 44 bushels per acre in 1998. "Looking at the state average is deceptive," said Ohio State agricultural economist Carl Zulauf. "What is going on in this state is an incredible variability of yield." Zulauf thinks corn and soybean gross income for the average Ohio farmer will decline only by 5 percent to 10 percent based on yield, expected harvest price, and the government's marketing loan rate that offers some protection. That's also not taking into account that Congress might provide more relief by increasing marketing transition payments within the framework of the 1996 Freedom-to-Farm legislation. "For a state perspective, a 5 to 10 percent drop in grain income is a negative for the farm sector, but it's not a terrible situation," Zulauf said. On the other hand, agricultural economist Allan Lines said farmers in drought-stricken areas will be bearing most of the burden of the gross income decline, which he estimates at 11 percent. "It just depends on what your situation is and how good your crop is in your part of the state," Lines said. "Most of that reduction is absorbed by farmers without a crop in drought-stricken areas. "The dollar loss I estimate at $220 million gets to be a pretty sizable number if you're a farmer without a crop in places like Fairfield, Clinton and Pickaway counties where the drought hit hardest." Lines thinks the USDA report released on Sept. 10 is a harbinger of worse yields to come. The survey for the report was based on Sept. 1 conditions, and "the condition of the crop grew worse after these estimates were made," he said. Yet, the estimates were probably more accurate than usual for that time of year, Zulauf said. The crop was generally planted early, was reaching maturity very early, and had less chance for an unexpected yield drop due to an early frost, he said. Weather problems in other parts of the Corn Belt prompted USDA to lower its national yields from its previous report in August. The national corn yield is pegged at 132.2 bushels per acre, or a drop of 2.5 bushels per acre since the August report. The 1998 national corn yield was 134.4 bushels per acre. As for soybeans, USDA estimates a 37.9 bushel-per-acre yield, or a 1.3 bushel-per-acre decline from August. The 1998 national yield was 38.9 bushels per acre. "The market already factored in these production numbers into prices by the time the September report was released," Zulauf said. "We've seen, at least in soybeans, a price increase of about 50 cents per bushel since the last report in August due to the decline in crop condition." Lines was more cautious about any price relief, saying the markets reacted with a "yawn" when the Sept. 10 report was released. "Corn was down a couple cents and beans were about steady. I would have expected more of downward adjustment in corn and maybe even a little down on soybeans, but the market took the news of this report well. I think the run-up in prices is over." Overall, USDA projects corn prices to range from $1.75-$2.15 per bushel compared to the 1998 average of $1.95 per bushel. The price range for soybeans was projected at $4.40-$5.20 per bushel, compared to an average $5 per bushel in 1998. The combination of drought-limiting yields in some areas of Ohio and overall low crop prices was double trouble to some farmers, said Ohio State corn specialist Peter Thomison. "For some farmers, it's been a lose-lose situation," said Thomison. "Not only are prices down, but yields in drought-affected areas are abysmal." In the worst cases, yields could be as low as 20-40 bushels per acre in the south, Thomison said. On some farms, the cost of harvesting the lowest-yielding fields could turn out to be more than the value of the crop itself, he said. Overall, though, yield losses might be less than in past droughts due to the development of improved corn hybrids that can stand more stress, Thomison said. "We don't see the levels of barrenness that was more evident 10 to 15 years ago under these kind of growing conditions," he said. Stalk quality may have been affected by late-season drought, Thomison said. Drought can result in weakened stalks because the plant remobilizes carbohydrates from the stalks to use in ear development. Consequently, plants with weakened stalks can fall down under the force of severe storms, which slows harvesting and results in the loss of ears on broken stalks that are bypassed by harvesting equipment. As for soybeans, the season couldn't have begun any better as dry weather in April and May allowed an early planting, said Ohio State agronomist Jim Beuerlein. Stands turned out to be excellent almost everywhere in Ohio. But early spring was the only overall good part of the growing season. The continued development of the crop depended on season-long rainfall--and some areas didn't get much--although other areas did fairly well, Beuerlein said. "Most of the state was drier than normal," Beuerlein said. "Some areas had major drought while other areas had normal or above-normal rainfall. Generally rainfall has not been well distributed. The south and eastern areas are worse than north and west." The consequence of drought was a harvest as much as two weeks early because the hot and dry conditions brought soybeans to physiological maturity earlier than usual. Beuerlein said some fields were ready for harvest before Labor Day, which is unheard of in most years. "You'll see a lot of fields harvested before Farm Science Review," Beuerlein said. (Farm Science Review is Sept. 21-23.) Probably the only salvation was the early harvest, which allowed farmers to forget the season's trials as soon as possible. "Almost everybody is disappointed with the growing season, but they realized they did their best," Beuerlein said. "This was a situation over which they had no control. "Most people did everything right. The only mistake was planning for a normal growing season, and you can't fault someone for that." As drought dried up the pastures in southern Ohio, some beef producers culled low-performing cows they would have usually sold in fall, said Southern Ohio Grazing Coordinator Ed Vollborn, Jackson County. A few producers might have also liquidated their herds, he said. However, the drought's effect on beef production is hard to sort out at this point of the season, Vollborn said. On the bright side, the drought forced farmers to act on long-delayed decisions to change their production, he said. "It forced people to make long-term decisions they had been contemplating over time," Vollborn said. "We're probably going to come out of it with higher-quality cows and higher-producing herds." The drought also brought out producers' creativity in providing for their cattle's forage needs, Vollborn said. Some farmers seeded pastures with alternative forage crops -- as varied as rye or turnips -- to help cattle get through anticipated shortages. August's resumption of rainfall turned around dried-out pastures dramatically, but producers are still lacking reserve forage to get their herds through fall, Vollborn said. "There's no stockpile left," Vollborn said. "We're basically using it up as the pastures are producing it. It fills a daily need without producing a reserve." As for overall hay shortages, Vollborn thinks there's enough hay in cash-hay producing areas of Ohio to help out the drought-stricken areas. An added problem is the cost of transporting hay to people who need it. "I get frequent calls from somebody in Ohio wanting to sell hay," Vollborn said. "Personally I think there's enough hay in Ohio to go around, it is just a matter of being able to cash-flow the purchase and transportation cost." -30- All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status. Keith L. Smith, Associate Vice President for Ag. Adm. and Director, OSU Extension. TDD No. 800-589-8292 (Ohio only) or 614-292-1868   | C.O.R.N. | Newsletter | Ohioline | Publications |