Iowa farmers are cautious about taking advantage of rising crop prices as drought concerns deepen during planting
The soil was so dry in one of April Hemmes' cornfields, it fell from her hand like dust when she dug into the ground this week to check whether the seeds she planted had germinated.
Hemmes' north central Iowa family farm had received trace amounts of rain, missed by most of a storm that dumped up to 2 inches just north of her.
"My husband said we have a chance for a few sprinkles tonight," the 61-year-old farmer, who lives just south of Hampton, said Wednesday. "Right now, I'd take that."
Luckily, corn planted in Hemmes' other fields is popping out of the ground, finding enough moisture to begin the summer's growing season. But the emerging corn only slightly diminishes Hemmes' concern about the growing drought.
"I've never seen a spring this dry," said Hemmes, who's farmed for 36 years, starting with her dad and grandfatherbefore she took over the operation.
Concern that dry conditions in Iowa and other parts of the nation will reduce crop yields is helping to drive grain prices to highs farmers haven't seen in nearly a decade. Corn that farmers will deliver in October is inching toward $6 a bushel at Iowa elevators; soybeans are trading around $13.
Prices are roughly double what growers have seen in recent years, when they were hammered by oversupply, trade wars and reduced export demand due to the global coronavirus pandemic.
But many farmers, though thrilled to see the higher prices, are cautious about taking advantage of them, unsure how much crop they'll have to harvest in the fall, agriculture experts and leaders say.
Farmers are asking themselves, "How aggressive do I want to get ... before I can see if I can get my crop to its full potential?'" said Chad Hart, an Iowa State University agricultural economist.
A report Thursday showed drought conditions expanding across Iowa. About 40% of the state is in moderate or severe drought, the U.S. Drought Monitor showed. Severe drought continues to grip northwest Iowa, and moderate drought has grown to encompass much of the northern half of the state, including Franklin County, where Hemmes lives.
As a result, she's sold ahead only a small amount of the corn and soybeans she would normally expect to harvest. "I would love to sell ahead, but not with the way this-all looks," she said.
Drought likely to be a worry throughout growing season
While the spring was somewhat dry, drought conditions in Iowa "ramped up pretty quickly," said Dennis Todey, director of the U.S. Department of Agriculture's Midwest Climate Hub in Ames.
Todey said parts of Iowa over the past 30 days have received less than half the average rainfall. "Not only are we not getting precipitation," but hot, dry air and strong winds last week "evaporated a lot of water from the surface," he said.
"That was that great sucking sound you heard last Saturday," Todey said.
Some showers this week have helped stem worsening drought conditions, he said. But only one-fifth of the state had adequate moisture, and mostly in corridors along Iowa's eastern and western borders, the Drought Monitor shows.
The outlook for the next couple of weeks calls for cooler and wetter than average conditions, Todey said. "We may not fix the situation, but it may improve," he said.
Drought is likely to remain a concern through the growing season, though. The forecast calls for a warmer, drier summer.
"Do I expect to see some ongoing drought problems through the year? Yeah, I do," Todey said. "But we have some drought problems around the Midwest and Plains most every year.
"It's a matter of how much of the area is in drought and how severe" it gets, he said, adding that he can't "with any specificity" say whether farmers could see a return of the catastrophic droughts of 1988 or 2012.
The 2012 drought started in late 2011 and lingered until 2014, driving prices for corn and soybeans to record highs.
Lingering effects from August derecho also a concern
In some places, farmers have dug down 2 or 3 inches before finding moisture, said Mark Licht, an ISU Extension cropping system agronomist. That's prompted some farmers to consider planting seeds a little deeper, so they can reach the moisture they need to germinate.
In addition to drought concerns, farmers in the middle third of Iowa, hit by last August's derecho, also must contend with millions of seeds from corn stalks downed by hurricane-force winds across millions of acres.
Volunteer corn is considered a weed that will lower yields. In part due to that, farmers are planting 400,000 fewer acres in corn, shifting instead to soybeans this year, Licht said. On most Iowa acres, farmers plant soybeans that can be sprayed with a herbicide that kills corn.
Licht expects most Iowa farmers will wrap up planting corn and soybeans in the next few days. Then begins the anxious wait to see whether the seeds will get the moisture they need to grow, he said.
It's something Hemmes is struggling with. She plans to closely watch the cornfield where some seeds lie in dry soil. In other parts of the same field, plants are emerging. The unevenness can create problems, with plants competing for moisture, nutrients and sunshine.
"It's not good," she said.
If conditions don't improve, Hemmes said she will have to weigh whether it is too late — or too dry — to replant the field.
Higher prices won't fix years of problems
Higher corn and soybean prices will help farmers who have struggled to earn a profit in recent years. But that's unlikely to be enough to solve farmers' financial woes, which have deepened over the past six years.
"There's no doubt that the last several years have been very challenging for producers," said Iowa Agriculture Secretary Mike Naig, who helped his family plant their crops near Cylinder in northwest Iowa this spring. "You can't fix that in one season,"
Naig said government payments to offset trade and COVID-19 losses helped farmers stay afloat. Iowa farmers have received nearly $5.4 billion in farm subsidies since 2018.
"Last year, those payments kept me going. That's the truth," said Hemmes, an Iowa Soybean Association director who also serves on the United Soybean Board, which uses a small piece of soybean sales to find new markets and uses for the crop.
The rising prices for corn and soybean growers have a flip side: They also mean increased costs for producers feeding cattle, pigs, chickens and turkeys.
"If you're on the crop side, you're definitely enjoying the run-up in prices," Naig said. "If you're on the livestock side, you're having to manage your risks."
High prices for pork, pushed by increased demand from China and other countries, are making it easier for those producers to absorb increased grain prices.
Cattle producers have failed to see a sustained bump, said Lee Schulz, an ISU agricultural economist. But consumer prices for beef and chicken, as well as pork, posted year over year gains in March. Spending should continue, given stimulus payments that have put more money in Americans' pockets and a decline in coronavirus restrictions, allowing consumers to return to restaurants, he said.
In addition, the start of grilling season means "retail meat prices could stand to gain more momentum in the near term," he said.
As for Hemmes, despite her worries about this year's crop, she's still benefiting from the good luck of having held a bit of last year's soybeans in storage. They're selling for a couple of dollars more than the crop that's getting planted this spring.
"I'm very fortunate to have held off in some of my sales," Hemmes said.
"A lot of us sold our grain last fall," she said. "The prices were good. And the banker likes to get paid."
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at firstname.lastname@example.org or 515-284-8457.