Back to Dust Bowl Days

First came the torrential rains of spring, sweeping away thousands of planted acres in the Midwestern grain belt, gouging great creases in the fields and delaying planting of new crops. Then the rain stopped, and for well over a month now, the sun has risen like a bright brass gong in a white sky. While days, then weeks passed without rain, the sun parched the soil and left corn stalks brittle, stunted and dead. From the Dakotas southward to Texas, from Kansas east to parts of Ohio, the most baleful weather in a generation is raising the specter of economic disaster for Midwest farmers and the businessmen who depend on them. The big drought is daily diminishing what had been estimated would be a bumper yield of corn, soybeans and other feed grains. Crops of spring wheat, oats and barley are also being reduced.

"It's the worst since 1934," says Nebraska Farmer Harold Buethe. Adds Gary Luth of Illinois: "Last year my soybeans were waist-to chest-high by this time. Now they're only ankle-to knee-high." Unless there is a break in the malicious weather this week, the corn crops could be devastated; soybean plantings will begin to burn up within weeks. Even if the rains come soon, this fall's harvest is now all but certain to drop well below amounts needed to restrain inflationary food prices. Says Jim Tippett, an official of the Illinois Farm Bureau: "We need hot, sticky weather now, with plenty of rain, the kind of weather that makes people suffer." Last week some rain fell in the Midwest, but officials said it was not enough to end the drought.

Shrinking Income. In part because of the drought, Agriculture Department forecasts for the corn crop have been revised downward, from 6.7 billion bu. in May to 5.9 billion bu. two weeks ago. Since then, conditions have grown worse, and by last week the National Corn Growers Association was predicting that the corn harvest would drop "significantly below" 5.5 billion bu. v. 5.6 billion last year.

In Nebraska, the state with the biggest crop damage, "dry land" farmers (those without irrigation) reckon that they have already lost 75% of the 235 million bu. of corn they expected. Many farmers are holding tight to whatever grain they have, and a lack of feed for Nebraska's record 7.5 million head of cattle is hurting ranchers. In all, Nebraska's farm income could shrink by $2 billion this year. Losses for Iowa and Kansas are conservatively estimated at $3 billion.

Dry weather is also punishing Illinois, where the soybean crop will probably fall 20% below earlier expectations. Farmers in Oklahoma are getting only three cuttings of hay instead of five, and the spring-wheat yield in North Dakota is expected to be sharply reduced. The Governors of Nebraska, Iowa and South Dakota have declared their states disaster areas. At the Midwest Governors Conference last week in Minneapolis, a resolution was adopted urging the Administration to expand farm disaster relief and increase crop price-support programs, which only last year were reduced in order to boost production.

For small farmers, the drought could be ruinous. For example, Kenneth Grove, who invested heavily in weed killers and fertilizers to work his 220 acres in Tecumseh, Neb., has given up on part of his crop and is now mowing it to feed his 80-head dairy herd. On the other hand, many large and middle-size farmers, who earned the bulk of the $32 billion in agricultural income last year, have enough financial protection to tide them over. Indeed, many big wheat farmers, who brought in their winter harvest before the drought struck, stand to make a bundle because they are holding back an unusually large proportion of their crop until prices are forced up still higher. Worst off are the cattle raisers, who overproduced in recent years in hopes of making plump profits, only to be thwarted by consumers, who sharply reduced their beef purchases rather than pay high prices.

Now, with supplies of livestock feed likely to be tightened, ranchers are cutting back production of new calves and sending more of their breeding stock to market. That will probably bring down beef prices in the next month or so, but they will probably soar again in the fall as cattle shipments dwindle.

Though no food scarcities are yet anticipated, the prospect of smaller crops is already driving up farm prices. After a four-month decline, prices for raw farm products jumped 6% between June 15 and July 15. In that time, wholesale meat prices surged 16%. Corn prices on the Chicago Board of Trade last week stood at $3.65 per bu., up more than $1 from June, and some traders think that they will soon go to $5 or higher. At the same time, soybean prices rose from $5.25 per bu. in June to $8.50, and wheat from $3.45 to $4.35.

Tilford Gaines, chief economist of Manhattan's Manufacturers Hanover Trust Co., predicts that rising food prices will keep living costs rising at a double-digit rate for the rest of the year, though he sees the pace slackening from close to 13% currently to about 10% by December. Says Gaines: "Except for 1946 and 1920, 1974 will probably prove to be the worst year in our history for consumer inflation."

Export Outlook. The outlook for farm exports, which the White House had hoped would offset the enormous cost of oil imports, is uncertain. Europeans and other foreigners are expecting satisfactory crops of wheat and feed grains and are less eager than in recent years to buy American farm goods. But further declines in U.S. crop expectations could well start a new rush of foreign buyers seeking to build their reserves as a hedge against future shortages. That might be a boon for the American trade balance, but it would kick the nation's food prices even higher. In addition, millions of people in Asia and Africa are living on the edge of starvation and looking to the U.S. food-aid programs for survival. A continuing siege of crop-killing weather in the American heartland this year could very well mean a rising death rate from Calcutta to Africa's famine-ridden Sahel.

Last week Agriculture Secretary Earl Butz suggested facetiously that the U.S. might save food by killing half of its dogs and cats. Said Butz in a speech to the American Society of Animal Science: "If some of those ill-informed, fuzzy-thinking do-gooders who suggest that we eat one less hamburger per week to release more foodstuffs to the world are really serious ... they could make the first onslaught on this noble goal by reducing our dog and cat population by 50%." Of course, Butz added, "I do not advocate such a thing."

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