The summer of 2005 is striking American farmers with a double-fisted blow. As the annual harvest begins, much of the country is facing the worst drought in 20 years. Farmers already struggling with high fuel prices have seen their situation go from bad to worse. Then came the catastrophe called Hurricane Katrina …shattering lives, ruining crops and halting commerce. Now, those who help feed the world and those who carry food to market are trying to rebuild their industries.
Greg Guenther stands amid rows of maize, or corn, wishing for the end of a brutal summer. As he inspects his field, one small corn stalk provokes both frustration and relief. "That's about a half an ear," he says, pulling back the husk. "It's about [14 centimeters] long, maybe. If all my ears were like this, I'd have (only) about a [2 to 2½ metric ton-per-hectare] corn crop. Fortunately, they're not all like this."
Mr. Guenther grows corn and soybeans 35 kilometers from St. Louis. In 30 years of farming, this year's crop is the most expensive he's ever planted. The price of fertilizer jumped $75 per metric ton over last year…and he says the money he spent on other input costs virtually erased his profit. "The return on investment on this is going to be close to zero."
The U.S. harvest is shaping up to be a checkerboard of fruitfulness and failure. While Greg Guenther hopes just to break even, others could reap a bounty second only to 2004's record season.
But Rick Tolman, head of the National Corn Growers Association, says the surplus corn from last year will drive the market down for everyone. "We have lots of corn available," he explains. "For those who had a good crop; again, prices are low, costs are high, so they're not going to make a lot of money. So everybody is suffering from it, but those who are hit in the drought areas are really hit with kind of the worst of all situations."
Hurricane Katrina only complicated matters. The storm heavily damaged the port of New Orleans, the fifth largest in the United States.
Though the port was officially re-opened September 13, major repairs are still underway, and grain barges on the Mississippi River north of the city are stalled for many kilometers. Lynn Muench, with the trade group American Waterways Operators, says the backup is hurting shippers. "At this point no one has any idea how much it's costing the industry, other than a lot."
Rising transport costs were already making for a tough season. But Ms. Muench says the storm has since added a more precious human cost. "The focal point is finding our employees. We have a lot of employees that live in the Gulf Coast, and many of the companies are looking for 20, 30, 50 employees at this point."
While some large vessels are loading goods in New Orleans, the cargo jam upstream is likely to continue into next week. Still, farmers insist it's too soon to calculate their losses. They're hoping to fulfill enough export demand this winter to make up for the slowdown they're feeling now.
The federal government is providing some relief. Several bills in the U.S. Congress offer new disaster assistance packages or extend older ones.
Senator Kit Bond of Missouri argues this crisis underscores the need to prevent another. Barges on the Mississippi River must pass through a series of locks and dams that adjust to varying depths. Senator Bond is sponsoring a $6 billion plan to rebuild the aging system, which he calls a liability for the economy. "Water doesn't just leak through the locks," he says, "it comes through in sheets. And they are a substantial block on our access to the world markets and to other areas of the United States."
Downstream from the locks, Greg Guenther has begun harvesting his crop. But he's worried about his income. Just one year after his most productive season to date, he is bracing for a slump in profits this season of as much as 40%. "This is a year to survive," he reflects. "This is not a year to grow your operation or to talk about what you're going to do to prepare yourself for the future. This is a year to survive."