The 2012 drought: Midwest pain, but profits for Pennsylvania corn farmers
Harold Foertsch, a Butler County family farmer, expects this year's harvest to turn a profit in spite of the drought affecting much of the country.
Harold Foertsch said that higher prices being paid for crops will more than offset any lower yield attributed to weather.
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Harold Foertsch hasn't had a great year for growing corn, but it has been a terrific year to sell it.
"I just sold four trailer loads at $8.60 [a bushel]," said Mr. Foertsch, the owner of Har-Lo farm in Jefferson Township, Butler County.
Last year's average price of $6.01 a bushel had been a record price for corn.
What makes this year's number even more impressive is that early in the 2012 season, corn prices were expected to be depressed because so many farmers -- motivated by last year's record price -- planted more corn.
But that was before the drought damaged much of the crop across the Midwest.
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- Declining corn yield affecting Iowa's cattle
The latest report from the U.S. Department of Agriculture found that just 21 percent of the nation's corn crop is in "good" or "excellent" condition. More than half, 52 percent, is in "poor" or "very poor" condition.
In the big corn states of Illinois, Indiana, Kansas and Missouri, less than 10 percent of the crop is "good" or better. In Iowa, it is 16 percent.
Pennsylvania usually has better crops than it has this year; 65 percent of the crop is in "good" condition or better.
Mr. Foertsch would be happy if his 400 acres of corn average a yield of 100 bushels an acre. Last year his yield was 119 bushels an acre, but the higher prices are making up for the lower yield, and Mr. Foertsch expects to earn about as much for this year's smaller crop as he did last year.
Not all of his corn sold for $8.60 a bushel this year. Farmers play the market as much as any stockbroker, and a good portion of Mr. Foertsch's corn was pre-sold at a lower price before it even matured.
Farmers across the country planted a combined 96.4 million acres of corn this year, the most since 1937 when 97.2 million acres were devoted to the crop. Yet the national harvest is projected to be the lowest since 2006.
Even with 5 percent more acres than last year, the harvest is expected to drop 11 percent because of the drought.
The USDA has reported that farmers will produce 10.7 billion bushels of corn in 2012. The average yield is expected to be 122.8 bushels an acre, the lowest since 1995.
Corn production on Pennsylvania farms is expected to top the national yield per acre, with 125 bushels an acre coming off the farms here. The USDA projected farms across the state will produce a total of 125 million bushels, 17 percent more than harvested in the state last year.
As Mr. Foertsch has found, prices are also up. The USDA reported the average price for a bushel of corn was $7.54 in August, or 9.5 percent more than in August 2011.
"This is sort of unusual for Pennsylvania farmers. Usually we have a drought and the Midwest has a good crop, so we can't get a good price," said Greg Roth, a professor of agronomy at Penn State.
Since the corn is coming in early, Mr. Roth said farmers also have a chance to plant spring oats, which thrive in cool fall weather and make a good animal feed to supplement grain and hay.
"You chop the corn one day, plant the oats the next day, maybe spread some manure and stand back," he said.
Corn isn't the only cash crop for farmers this year. Hay prices are also up.
Because of the drought, Brad Rippey, a meteorologist for the USDA, said pasture land in the U.S. is in as bad shape as it has been since the government started to keep track in 1995. For five consecutive weeks, 59 percent of the pasture land across the country was in "poor" or "very poor" condition.
Things improved marginally last week to 58 percent in "poor" condition or worse.
Marvin Hall, Penn State professor of forage management, said hay prices could reach as high as $400 a ton because of the drought in the West and Midwest. Hay is already going for $325 a ton. Normally, Mr. Hall said, the price runs between $160 and $200 a ton.
Even at that level, Mr. Hall said farmers don't tend to make much off the hay because they mostly feed it to their own livestock.
"A tremendous amount of our hay stays right on the farm where it is produced," he said.
Mr. Foertsch uses his bales to feed the cattle he eventually takes to a nearby meat market for slaughter.
Even with this summer's unusually dry weather, he is expecting a good year on the farm he bought in 1966.
The final tally, however, won't be in for months.
After the last of the grain is sold, Mr. Foertsch will have chance to sit down this winter with his books -- and the seed catalogs for next year.
First Published September 16, 2012 12:00 am