DROUGHT MAY HURT SPECIALTY CROPS

Matthew Enis

SPRINGFIELD, Ill. -- The relentless drought that has plagued the Midwest this summer has devastated the corn crops of Illinois and Missouri, leaving the future of the region's soybean crop in doubt and possibly hampering production of fall specialty crops, such as Illinois pumpkins.

Although the extensive damage is likely to lead to regional spikes in the price of animal feed, retailers and consumers are not likely to see higher beef or milk prices, due to several unrelated factors. Chicken producers, meanwhile, are still hoping that late summer rains lessen damage to soybeans.

"Our corn crop is planted first, and it was most severely hit during the worst portions of the drought," explained Chris Herbert, communications manager for the Illinois State Department of Agriculture. "But, there were some sporadic rains around the state later in the season, which may have helped many farmers' soybeans at a critical stage. We obviously don't know what the real numbers are going to be until after harvest, but our farmers are not predicting good yields."

Illinois is the No. 1 soybean-producing state in the United States and the No. 2 producer of corn, after Iowa. With rainfall at its lowest levels since the summer of 1988, the ma-jority of the state was declared an agricultural disaster area in July. The U.S. Department of Agriculture has rated 61% of the corn crop in "very poor" or "poor" condition. Forty-one percent of the state's soybean crop received similar negative ratings.

The corn crop in Iowa has fared much better, and despite any impact that corn prices might have on cattle finishing costs, little price inflation is predicted for conventional beef, which is still coming off record prices in 2004.

According to the USDA's National Agricultural Statistics service, the price of beef cattle was down $1.80 per head in July compared with a year earlier. Herds have expanded this year for the first time in a decade, cattle trade has recently been renewed with Canada, and an easing of a five-year dry spell in the Northern Plains has significantly improved ranching conditions in that region.

Similarly, dry, hot weather generally lessens the amount of milk a dairy cow will produce, but the drought, which has impacted Wisconsin as well, isn't likely to have an effect on milk prices. Milk consumption has been down slightly this year, but the number of dairy cows rose 0.6% in July compared with last year. Of the nation's 23 top-producing milk states, 22 have experienced significant increases in production in 2005, according to analyst Bob Cropp of the University of Wisconsin, Madison. Facing slightly more supply and slightly less demand, agricultural economists, including Cropp and Ken Bailey, Penn State University, have predicted weaker dairy prices in the coming months.

Chicken prices are most likely to be impacted if the Illinois soybean crop is similarly devastated, but price increases would likely be modest. Since Illinois is also the nation's largest producer of pumpkins, kids may have to settle for smaller jack-o'-lanterns this Halloween if the rains don't pick up soon.

"I think everyone's still watching," said George Watts, president of the National Chicken Council, Washington. "It's still too early to say what the final yields are going to be, but clearly, while there's certainly drought conditions in Illinois and Missouri, which are key states, in other parts of the corn belt there has been rain. Rains now would be critical for soybeans. As for corn, we think there should be an adequate crop, and while we may see corn prices up over last year, we're thinking right now that those prices will be manageable for animal agriculture. We're definitely not in a crisis situation yet."

Despite record temperatures, the number of chickens lost to heat had been in decline in recent years, thanks to better housing and ventilation construction, Watts said.