Thursday, May 23, 2019

Wettest Year On Record: Another Blow To Farmers And Agricultural Companies

Floods Swamp U.S. Farm Belt

The wettest year on record is raising costs for the nation’s biggest agricultural companies, stalling farmers’ fieldwork and slowing shipments across the U.S. Farm Belt.
“It’s got to be the worst ever that we’ve seen,” said Jim Collins, head of Corteva Agriscience, the agricultural division of seed and pesticide maker DowDuPont Inc. DWDP -0.84% Corteva’s sales fell 11% for the most recent quarter it reported this month, partly because of Midwestern floods.
The past 12 months were the wettest May-to-April period in the contiguous U.S. since record-keeping began in 1895, according to the National Oceanic and Atmospheric Administration. Since March, heavy snow and rain have brought record flooding to parts of the Midwest, and rivers have overflowed their banks from Illinois to Nebraska.
The dismal weather is another blow to farmers and agricultural companies during a prolonged slump in the U.S. farm economy. Six straight years of bumper crops have swelled grain supplies and pushed down prices for farmers, while protracted trade disputes have slowed crop exports, further pressuring farm income and agribusiness profits.

Nationwide, farmers have planted 49% of their intended corn acres, far below the 80% average for this time of year, according to the U.S. Department of Agriculture. Just 19% of soybean acres have been planted, compared with the 47% average. This year’s corn planting is the slowest since record-keeping began in 1980, according to agricultural economists at the University of Illinois.

The prospect of weather-diminished crops lifted corn futures prices 6.8% in the past week, while wheat futures climbed 5.2%. Soybean futures prices fell 0.7% on the potential for farmers to shift more acres to the oilseed.

Deere & Co., the world’s largest manufacturer of tractors and harvesting combines, said last week that the delayed spring planting season is adding to farmers’ caution on making major purchases. The equipment maker reduced its 2019 profit and sales forecasts to reflect sagging demand for its tractors and planters.

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