CHICAGO, Ill. (Reuters) — Torrential downpours across a broad swath of the U.S. Midwest last week are easing the worst drought in more than 50 years, flooding streams, snarling river transportation, stalling corn plantings and changing the outlook for the American farm economy in 2013.
The Army Corps of Engineers is closing locks along a 250 kilometre stretch of the Mississippi River from roughly Davenport in Iowa to Hannibal, Missouri. Barge traffic was backing up last week, as water levels were too high for barges to take on grain.
The Mississippi and other major rivers were cresting and likely will run over levies in some areas. That is a sharp reversal from as recently as January, when low water levels disrupted the main water thoroughfares that bring grain from the nation’s breadbasket to the world’s markets.
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“These rains are really helping bring most areas out of drought status. And the rain encompasses all of the western corn belt that was previously dry,” said Don Keeney, meteorologist for MDA Weather Services, a widely followed commercial forecasting firm.
If the drought is ending, it would represent a sea change for the farm economy, where expectations for another dry summer had been baked in.
Continued rainy weather could further delay spring plantings, cause a sharp fall in the price of farm commodities, and lower the cost of everything from hog feed to cereal ingredients.
An end to drought conditions would bring a burst in economic activity across the agriculture industry, from farmers in the fields to those operating grain elevators, processing companies and shippers.
“If in fact the drought is easing, and if we are migrating to a situation that might afford better yields, to my mind, for the full value chain, it’s a godsend,” said Bruce Scherr, chief executive of agribusiness analytics firm Informa Economics.
“Another year like last year would be devastating.”
