The view from the fields of Allen County is beyond discouraging for Gonzalee Martin. There's little hope to salvage a worthwhile corn crop this year, he said.
“Corn is anywhere from knee-high to waist-high. Much of it has already tassled with no ears at all. Much of it's going to be completely lost,” said Martin, agriculture and natural resources educator with Purdue University's Allen County extension office.
That squares with the worsening drought status of Indiana, reported Thursday in the weekly update of the U.S. Drought Monitor. According to that update, much of northeast Indiana remains in extreme drought.
All of Whitley, Noble, Kosciusko and Wabash counties, plus large parts of Allen, DeKalb, LaGrange, Steuben and Huntington counties, are in extreme drought.
Only a few counties in northwest and southeast Indiana are in moderate drought. The remainder of the state is all in severe or extreme drought.
One measure of the increasing severity of the drought was a revision in U.S. Department of Agriculture procedures for designating natural disaster areas. Under the new designation, more than 1,000 U.S. counties are likely to be eligible for disaster help based on the drought. The drought-stricken area includes most of the southeastern and southwestern U.S. A broad band of afflicted counties includes parts of Indiana, Illinois, Missouri, Arkansas, Tennessee and Kentucky. The department said this week that a disaster declaration is “nearly automatic” for counties that have been in severe drought for eight consecutive weeks.
“A lot of farmers will simply destroy their crops,” Martin said, referring to the drought-stunted corn. Soybeans are more resistant to heat and drought. If rain falls between now and the end of next week, it could revive soybean plants. “If we can get some precipitation on the beans, you'll see the beans turn around rather quickly,” he said.
Chris Hurt, a professor in the agricultural economics department at Purdue University, said there are a few factors which could cushion farmers facing yields that are dramatically reduced if not altogether absent.
First, the dependably strong demand for farm production creates what he calls a “natural hedge.” If yields fall, prices are likely to rise. Farmers who can harvest something from their fields would then be paid more per bushel of reduced yield.
“Of course, that doesn't help the farmer whose yield is zero. It doesn't matter if corn is a billion dollars a bushel – if you have zero bushels, your revenue will be zero,” Hurt said.
For many farmers, a key to financial survival in years of terribly low yields is crop insurance. Hurt said that crop insurance typically will cover 65-85 percent of a crop's value. He doesn't know how many Hoosier farmers insured their crops this year. Last year, he said, about 75 percent of the corn and 65 percent of soybeans were insured.
Another potential cushion: Generally speaking, farmers have prospered through several good years recently. Hurt pointed out that 2010 and 2011 were both record years for farm income in Indiana. If farmers who made a lot of money in the good years paid down debt and set aside cash reserves, they'll be better equipped to weather a disastrous year of drought.
Those record farm incomes have helped propel a boom in prices of agricultural land. For farmers who own, rather than rent, most of the land they work, those rapidly rising land prices provide yet another cushion, Hurt said. As an asset to sell outright or to use as collateral in borrowing, more expensive land provides a deeper cushion.
Hurt speaks about a typical or average farmer cautiously. Because there's so much variability among farm operations, he said, “When we talk about average, we may not actually be talking about anyone.”