In parched Midwest, corn shrivels under the sun

Last weekend, Jim Ufkin had a welcome treat: rain.

The inch and a half that fell was some of the first he's seen since March at his 500-acre farm in northwestern Illinois. Although too late to help his corn, he's hoping that it will allow him to salvage his soybeans.

"The corn crop is shot. It is what it is," Mr. Ufkin says as he walks through a field of scraggly brown stalks, many of them without an ear. He figures he'll harvest about 50 bushels an acre - a third of his normal average and far less than the 180 bushels per acre he got last year.

Already, 2005 is turning out to be the kind of year that many corn farmers in the United States will remember for decades: dry, hot, and financially tough. Illinois has been hardest hit, with all but one county declared an agricultural disaster area and its corn crop expected to be cut by nearly a third. But 29 of the 33 corn states will see lower yields, according to the US Department of Agriculture (USDA). It projects the harvest will fall 12 percent from last year's bumper crop.

"Prices will be stronger," says Allen Baker, a corn analyst with the USDA's Economic Research Service, which released its monthly feed outlook Tuesday.

But ample supplies left over from last year have kept forecasts for crop prices from going up as much as farmers might hope, and consumers won't see much change in food prices. Of course, "this is just the first estimate," he emphasizes.

Here in western Illinois this summer, farmers got used to the sight of darkening clouds that never released a drop, and reports of rain that never materialized. "I started calling it the morning skip," says Ufkin, laughing a bit. "The clouds would skip the Mississippi River, and wouldn't rain again until they got to Kankakee," near the Indiana border.

The upshot is a financial setback for Illinois farmers, many of whom carry some crop insurance but who operate on increasingly small margins. With extreme drought like this - the worst since 1988 - those producers hit hardest will need several good years to recoup their losses.

Ufkin, like most farmers, keeps a mental tally of numbers - crop prices, acreage yields, energy costs, interest rates - and quickly reels off estimates of the damage to him and his neighbors. For every acre of corn planted, he figures, area farmers have lost about $140, even after receiving insurance money for the crop loss. That's a huge $50,000 loss for producers growing 500 acres of corn.

Every farm operation is different, he adds, but he estimates this year will be worse for local farmers than the drought of 1988, in part because of the rising cost of fuel and fertilizer. "This is the most expensive crop we've put in the ground," he says.

With the disaster-area designation, he and his neighbors are eligible for special low-interest loans, but the requirements - like being turned down by a bank - will disqualify many. Ufkin is hoping for some additional disaster relief. "I'm not a believer in government bailouts," he says. "But I look at it like unemployment insurance - except we still have to go to work every day."

Southeast of Hooppole, Putnam County saw some of the worst of the drought. Jonathan Downey, a fourth- generation farmer and one of the few who relies solely on his farm profits to support his family, only got a quarter of the rain he normally receives between March and July. "I guess this was our turn," he says.

Some 640 acres on his 1,240-acre operation are devoted to corn, and he thinks he'll be lucky to average 60 bushels an acre. In one particularly bad section, the brown stalks barely reach his knees. He pulls off one of the few visible ears - without a single kernel - and wonders if it's even worth chopping down the stalks for silage.

Downey, like Ufkin, is hoping that the soybean harvest will be closer to normal. His cattle business may also help offset the losses. But Downey, who started farming with his father right after college, says he can't imagine doing anything else: "I love the lifestyle and being outside, planning for the crop, and seeing it grow and come to fruition."

A farmer is sometimes like being a Cubs baseball fan, says Ufkin, driving his pickup by brown cornfields. "You always have to wait till next year."