* Drought busting rains blanket Midwest
* May cause sharp fall in price of farm commodities
* Could cut feed prices, helping livestock, dairy producers
* Downpours cause flooding, river transport problems
* Southwest corner of U.S. Plains stays in drought
By Karl Plume and Sam Nelson
CHICAGO, April 19 Torrential downpours across a
broad swath of the U.S. Midwest this week are easing the worst
drought in more than 50 years, flooding streams, snarling river
transportation, stalling corn plantings - and changing the
outlook for the American farm economy in 2013.
The Army Corps of Engineers is closing locks along a
150-mile stretch of the Mississippi River from roughly Davenport
in Iowa to Hannibal, Missouri. Barge traffic was backing up
Thursday, as water levels were too high for barges to take on
The Mississippi and other major rivers are expected to begin
cresting Sunday - and likely will run over levies in some areas.
That is a sharp reversal from as recently as January, when low
water levels disrupted the main water thoroughfares that bring
grain from the nation's breadbasket to the world's markets.
"These rains are really helping bring most areas out of
drought status. And the rain encompasses all of the western Corn
Belt that was previously dry," said Don Keeney, meteorologist
for MDA Weather Services, a widely followed commercial
If the drought is ending, it would represent a sea change
for the farm economy, where expectations for another dry summer
had been baked in. Continued rainy weather could further delay
spring plantings, cause a sharp fall in the price of farm
commodities, and lower the cost of everything from hog feed to
Lower feed prices would help livestock and dairy producers,
but soft grain prices could cut into farmers' incomes and
perhaps even cause farmland values to retreat from recent record
An end to drought conditions would bring a burst in economic
activity across the agriculture industry - from farmers in the
fields to those operating grain elevators, processing companies
"If in fact the drought is easing, and if we are migrating
to a situation that might afford better yields, to my mind, for
the full value chain, it's a godsend," said Bruce Scherr, chief
executive of agribusiness analytics firm Informa Economics.
"Another year like last year would be devastating."
The 2012 drought brought corn production to only 10.8
billion bushels, a six-year low, with yields reaching a 17-year
low of 123.4 bushels per acre. The production losses added to
the impact of rising exports to China and domestic demand for
ethanol production to drive corn prices on the Chicago Board of
Trade to an all-time high last August.
Farmers filed a record $11.8 billion in crop-insurance
claims, according to Agriculture Department data. And farm
income fell last year by 3 percent from a record set in 2011.
"Isn't it ironic that all winter we've been worried about
dry soil, and all of that has changed in a period of four or
five weeks," said Rich Feltes, vice president of research for
Chicago commodities brokerage R.J. O'Brien.
Drought conditions persist in the southwest corner of the
U.S. Plains where hard red winter wheat is a dominant crop.
Southeast Colorado, southwest Kansas and the Panhandles of Texas
and Oklahoma remain dry, Keeney said. The western states of
Kansas and Nebraska would need another 2 to 4 inches of rain to
end the drought, he added.
In the western Great Plains, where some areas have
experienced three years of dry conditions that have eliminated
subsoil moisture, even a flurry of steady showers may not cause
the drought to break. "We just have very serious drought issues
and we will not be able to eliminate them overall," said Dennis
Todey, state climatologist with South Dakota State University,
during a National Weather Service drought update call on
For the rest of the Midwest, though, the drought may be
Even before this week's rains, early spring showers had
ended the drought in roughly the eastern two-thirds of the
Midwest, Keeney said.
Since Saturday, more than 6 inches of rain has fallen in
some areas, with much of the upper Midwest receiving at least 2
inches. Weather forecasters were predicting as many as 4 inches
of rain in the next 24 hours.
Heavy rains overnight Thursday caused flooding in some
areas, closing roads and clogging river traffic. In downtown
Chicago, at least one expressway closed Thursday morning due to
standing water, and commuter rail lines were delayed by
switching problems related to the heavy rainfall.
High water also hindered barge loading at riverside grain
terminals, while swirling currents impacted movement. At Gulf of
Mexico export terminals, prices for corn and soybeans jumped by
10 cents a bushel as shippers scrambled to fill ocean-going
vessels before much Mississippi River traffic grinds to a halt.
"When the river gets to these levels, people might not have
enough clearance to get a barge under the barge spout to start
loading it," said Gerald Jenkins, general manager at Ursa Coop,
which owns three river elevators. "If it's not an issue today,
it will be within a day or two because the river is expected to
go up at least another 5 or 6 feet."
Rising water on the Mississippi River was forecast to close
seven river locks from Muscatine, Iowa to Saverton, Missouri
beginning on Friday, effectively halting barge shipping until at
least next week, after the river crests starting on Sunday.
As recently as February, low water levels on the Mississippi
had forced the Army Corps of Engineers to dredge shipping
channels between St. Louis and Memphis, Tennessee.
More flooding could come in the next day or so in Missouri,
northern Illinois, southeast Iowa and west central Indiana,
The Red River Basin, between North Dakota and Minnesota,
also was expected to overrun its banks in late April, which
would bring floodwaters into the grain fields of Manitoba,
The wet weather has caused U.S. corn plantings to fall
behind the typical pace for spring seeding, but agronomists said
farmers still have plenty of time to plant corn. And those who
cannot get corn in the ground by mid-June can turn to soybeans,
another cash crop.
"It's certainly delayed, especially when compared to last
year's early start, but it's not late yet," said Robert Nielson,
agronomist for Purdue University, West Lafayette, Indiana.
The U.S. Department of Agriculture on Monday said 2 percent
of the U.S. corn crop had been planted. Last year, 16 percent of
the crop had been planted, and over the last five years, an
average of 7 percent of the corn crop had been planted by this
Nielson said Indiana farmers would plant corn through the
month of May, even on into early June, before switching from
corn plantings to soybeans. Farmers who wait that long would
switch to hybrids that mature more quickly than common corn, he
Emerson Nafziger, agronomist for the University of Illinois,
said any further delay in planting could affect crop yields.
"Nobody is panicking yet, but it does put planting behind, and
everyone knows that on average late planted corn doesn't yield
as well," he said.
Gary Blumenthal, head of agricultural consultancy World
Perspectives in Washington, said farmers who spent most of last
summer desperate for rain are now concerned they won't get to
plant their corn on time. "There's a lot of uncertainty, but
it's just uncertainty," he said. "I'm not sure we are at the
point where we have certain adverse impact. My goodness, it's
only April 18."
(Reporting by Sam Nelson, Karl Plume, Christine Stebbins and
Julie Ingwersen; Editing by Martin Howell and Joseph Radford)