Michigan Growers Face Challenging Fall

LANSING - Sep 8/05 - MFB -- Hurricane Katrina is an extra wrinkle in what was already shaping up to be a potentially challenging harvest season for Michigan's grain farmers.

While it's too soon to predict how the fall harvest will play out, agricultural experts agree the state's corn and soybean producers face potential pitfalls from nearly every angle, and communication between farmers and grain handlers will be essential.

"Michigan farmers need to be aware of potential challenges this fall in harvesting and moving crops out of Michigan," said Michigan Farm Bureau (MFB) President Wayne H. Wood.

"The Michigan Farm Bureau is working with the Michigan Agri-Business Association (MABA) to inform growers about the situation, as is Michigan State University," said Wood. "Individual producers play, perhaps, the most important role. Farmers need to anticipate the timing of their harvest and projected production and share this information with their local grain merchandiser. If everyone cooperates and works together, we can have a smooth harvest."

Michigan farmers might be forced to store corn and soybeans on the farm rather than at their local elevator because in addition to market disruptions caused by Hurricane Katrina, the state's grain merchandisers are dealing with substantial carryover of 2004 grain stocks. Combined with projected production for the 2005 harvest, elevators are bracing for storage capacity to be at 117%, the largest supply-to-storage ratio since 1983, according to Dave Geers, president of Michigan Agricultural Commodities (MAC).

More than half of the 2004 carryover is the result of last year's record-setting corn crop, which yielded 134 bushels an acre. If the weather continues to cooperate, there's a possibility that this year's corn crop could once again produce an all-time-high yield - a scenario that would only compound already tight storage capacity.

Data compiled for MAC predicts Michigan corn will yield 135 bushels per acre this year. The data also forecasts a 3% increase in corn production, climbing from 257 million bushels in 2004 to an estimated 266 million bushels in 2005. Soybean production also is expected to rise slightly from 75 million bushels to 76 million bushels.

"You build infrastructure for an average crop, not record crops," said Geers.

Thanks to toasty temperatures that have translated into needed heat units for plant growth, Michigan's corn and soybean crops are maturing well ahead of schedule, speeding up harvest plans for many growers. In fact, some producers expected to begin harvesting soybeans by the week's end.

Unfortunately, it looks like the crops will come off farm fields at the same time grain handlers and exporters across the nation are scurrying to recover from Katrina's aftereffects. The timing of these two factors could create a situation where Michigan farmers speedily harvest crops for delivery to the local elevator, but the elevator can't move existing product fast enough to accommodate a flood of new grain.

"Producers should check with elevators in their area to determine if additional or under utilized storage is available," recommended Bob Boehm, manager of the MFB Commodity and Marketing Department.

Hurricane or not, crop storage is always a concern of farmers and elevators. Ideally, farmers harvest their crop and deliver it to a local grain elevator where the crop is either marketed immediately or stored at the elevator to be sold at a later date. This is preferred to leaving crops in farm fields where unharvested crops are vulnerable to damaging weather, pests or wildlife.

Given the current situation, elevators may opt to lower the price paid to farmers initially as a means to dissuade producers from overflowing the business with supply early in the harvest season. Incentives could be offered for crops sold later in the season.

"The only real solution is to be patient and spread the harvest out," Alan Thrush, of the Archer Daniels Midland Company, advised producers.

Agricultural leaders also urge farmers to follow proper procedures for temporary storage of crops on their farms, including storing the crops on a clean hard surface, covering them and making sure there is adequate aeration. Michigan State University experts plan to make recommendations for temporary on-farm crop storage available to producers soon.

On top of storage concerns, limited modes of transportation to haul bulk commodities has been an inherent problem for Michigan's agriculture industry.

As a peninsula state, Michigan relies heavily on short-line railways and freight trucks. Hurricane Katrina has made accessing rail cars and trucks extremely competitive - one more wrinkle that could slow the movement of grain out of Michigan elevators, said MABA President Jim Byrum.

When Hurricane Katrina halted business at Gulf of Mexico ports along the Mississippi River, many in the Michigan agriculture industry feared the industry's transportation woes would dramatically worsen. However, the outlook is more encouraging today, with news reports of ports getting back online and Mississippi River traffic resuming.

Still, Boehm acknowledges that the lost shipping days will be difficult to make up. "It's a lost window to move the old crop to make room for this year's harvest," he said.

Even before Katrina made landfall, Michigan farmers were suffering from skyrocketing energy costs to run their businesses. Prior to the hurricane, the U.S. Department of Agriculture (USDA) said U.S. farmers would pay $2 billion more in fuel this year. That figure is sure to rise in the wake of Katrina, the USDA said Wednesday.

Copyright (c) 2005 Michigan Farm Bureau