Farmers Face Post-Drought Worries

Thursday, July 13th 2000, 12:00 am

By: News On 6

CHAMPAIGN, Ill. (AP) â€” A couple of months ago, weather experts forecast an epic drought. Now, rain-drenched farmers in much of the Midwest are hearing that the drought may be over and market experts predict a record-breaking bumper crop.

Illinois farmer David Shupe just shakes his head.

``Nobody knows anything yet,'' said Shupe, who grows corn and soybeans in Toledo, Ill. ``It's too early to be making predictions. We've got a long way to go.''

Forecasters are standing by predictions of a hot, dry summer. The generous rains that quenched Illinois, Indiana and Iowa missed places like western Nebraska, where drought conditions are still rated severe. Some places that got rain have new woes, such as crops potentially damaged by standing water.

``There are plenty of acres out there that have problems,'' Shupe said.

Still, the prognosis has changed dramatically. Over the nine months leading into April, Illinois got six to nine inches less rain than normal. Soil moisture was at dangerously low levels. Wells dried up. The predicted drought seemed to have devastating potential.

That drove futures prices above $2.70 a bushel for corn in late April, after hovering around $2.55 most of the year for the December contract. Some market experts suggested farmers sell reserves or sign contracts to sell this year's crop at that price. Drought predictions made some farmers afraid to sell because prices might skyrocket or they might not get the yield needed to match the contract.

``It's hard to sell when everyone at the coffee shop is telling you they dug a fence post and it's really dry down there,'' said Jim Prough, a grain merchandiser at The Andersons elevator in Champaign. ``Some people were operating on the hope strategy â€” that the drought gets prices up, but the drought hits everywhere else but my area.''

Then, the rain came. A few southern Illinois towns got 10 inches of rain in June, twice the normal amount. Most of the region was wetter than normal, according to the Midwest Regional Climate Center. Corn is ahead of schedule, and the U.S. Department of Agriculture on Wednesday said it foresees a huge crop.

Farmers are expected to harvest 73.1 million acres of corn this year, up 3.7 percent from 70.5 million last year.

So prices fell. The government Wednesday predicted corn prices will average $1.70 â€” 15 cents less than it predicted last month and down 10 cents from the 1999 crop. The report predicted lower prices for soybeans and wheat, too.

University of Illinois marketing specialist Darrell Good said local corn prices are about $1.56, a few cents below last year.

If the markets hold, some farmers could be in trouble. In those patches of the country where rain damaged the crops or where drought still persists, they'll be dealing with low prices and low yield.

That's the fear in western Nebraska.

``We are catching the edges of these storms coming out of South Dakota,'' said Allen Dutcher, Nebraska's state climatologist. ``We're right on the borderline in the eastern part. If the rain continues, it won't be a problem. But we can easily slip back the other way. The western part of the state, well, it's miserable.''

Across the center of the United States, only Nebraska showed up this week with extreme conditions on government drought maps. The southeastern states of Georgia, Alabama and Florida also have some extreme dryness, but conditions have stabilized across most of the country.

Lin Warfel, who farms in the central Illinois community of Tolono, said early July prices and predictions are irrelevant. Too many weeks remain until harvest to start banking on a huge 2000 crop or to start dismissing the 2000 drought.

``Some of us may wish we had sold in the spring,'' he said. ``But it isn't over until it's over.''