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Ag outlook: Drought effects to linger in 2013


January 02, 2013
While this past summer's devastating drought was definitely felt by farmers in Southern Indiana, it appears the drought continues to affect many in the western cornbelt states, particularly Nebraska.

The drought was the main discussion point at the Harrison County Purdue Cooperative Extension office's annual agricultural outlook meeting for county farmers, held Dec. 18 at the Purdue Building in Corydon.

Speaker Chris Hurt said 96 percent of Nebraska is currently in stage 3 or 4 drought (stage 4 being the worst).

"Just try to find a farm (in Nebraska) that's not in terrible condition," he said. "It's not going to go away this winter."

Stage 4 drought typically occurs once every 100 years, Hurt said.

When Indiana was at its driest in early August, 69 percent of the state was in stage 3 or 4 drought. As of Dec. 4, Indiana had a small strip at the top of the state in stage 1 and some other areas that are abnormally dry.

"There's still some vulnerability, but it's better than where we came from," Hurt said. "The drought of '12 is still very much with us (mainly western cornbelt states). It is very much a 2012 and 2013 drought."

Hurt reported that the top six states in corn production are (in order most years): Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota.

A Minnesota corn farmer told Hurt that he had an excellent year, profiting about $1,000 per acre. Hurt said the reason it was so strong in Minnesota was because other areas, such as Indiana and Illinois, had a poor crop yield because of the drought reducing the overall supply.

"We had them this year; it's your turn next year," Hurt said about Minnesota and other areas receiving the bad weather this region had.

He said it very well could work in the favor of Indiana farmers this year because it is out of the drought and it appears western cornbelt states will still be faced with drought issues, which could lead to high yields for Indiana farmers but continued high prices.

"It's all up in the air," he said.

Hurt revealed his predictions for the upcoming years for corn and soybean prices.

"Since I can't tell you what's going to happen tomorrow, I'll tell you what's going to happen the next four years," Hurt joked. "I can predict it; I just can't predict it accurately."

Hurt said those in agriculture professions have been through a lot since 2005.

"That was the last year in the era of $2 corn," he said.

Expect prices to be about $6.20 for corn next year and even less, into the $5 range, in the following years, Hurt said.

He called 2012 "the granddaddy of all bad years" for crop production, saying production in Indiana was, on average, about half of what it should be in a normal weather year. It marked the third year in a row of a below normal crop yield for the state.

"We certainly had some very low yields," Hurt said. "I'm not willing to bet anything ... that we won't have four."

Hurt said the drop from $7-plus corn to $6 could occur as early as July.

The meeting was hosted by Extension educator Mi-randa Ulery, and chili, cornbread and dessert was served to the attendees. The food was prepared in the Casada Kitchen of the Purdue Building.

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