Drought to take toll on hog producers

Drought to take toll on hog producers

A roundup of agricultural news:

URBANA — Hog farmers could be hurt as much as — if not more than — grain farmers by this year's drought, a Purdue University Extension economist said.

"The immediate view is that crop producers will bear the brunt of the financial losses, but losses in animal industries will be enormous over the next year, perhaps becoming considerably greater than for the crop sector," Chris Hurt said.

If crop yields are low, feed prices will rise — and usually by a greater percentage than the yield drop, Hurt said in a release distributed by the University of Illinois.

"These higher feed prices have to be absorbed by the animal industry, causing a collapse in financial margins," he said.

Those will result in financial losses for livestock producers and the liquidation of some breeding herds and flocks this summer and fall, Hurt said.

The increased slaughter is likely to increase the supply of meat, causing livestock prices to fall.

Unlike grain farmers — many of whom have crop insurance — hog farmers tend not to have any form of income protection against higher feed prices, he said.

Meanwhile, the higher feed prices will push up the cost of production. Hurt said hog farmers are projected to have losses of "about $20 per head" for the next three quarters.

They'll have little hope to cover their costs "until feed prices move lower, which may be the fall of 2013," he said. "That is a long horizon of losses."

For hog producers who can survive the next year of financial pressure, Hurt said, "there can be improvement starting in the last half of 2013."

Crop conditions deteriorate

SPRINGFIELD — Corn and soybean crops statewide continued to suffer from lack of rain, according to a weekly report from the Illinois Department of Agriculture said.

As of Sunday, 23 percent of the corn crop was rated as very poor and 25 percent as poor. Another 33 percent was fair, 17 percent was good and only 2 percent was excellent.

Soybeans were marginally better. The state said 17 percent of the soybean crop was very poor, 25 percent was poor, 38 percent was fair, 18 percent was good and 2 percent was excellent.

The eastern region of the state — which includes the Champaign-Urbana, Danville and Kankakee areas — continued to be better off than most parts of the state in terms of soil moisture. But moisture levels continue to drop as dry weather persists.

In the eastern region, 51 percent of the topsoil was deemed very short on moisture and 40 percent was short. Only 9 percent had adequate moisture.

The same was true of subsoil, with 52 percent very short on moisture, 38 percent short and 10 percent adequate.

Corn continued to mature, with 77 percent of the state crop silked, up from 46 percent the previous week. Forty-two percent of soybeans statewide were blooming, up from 25 percent the previous week.

Ag department eases disaster declaration process

WASHINGTON — Eighteen Illinois counties were designated natural disaster areas by the U.S. Department of Agriculture this week, making farmers in those areas eligible for low-interest emergency loans.

The department amended its disaster-area declaration process this week, allowing counties to qualify if they've been determined by the U.S. Drought Monitor to have had a severe drought for at least eight consecutive weeks.

As a result, 18 counties in southern and southeastern Illinois qualified as "primary" disaster areas. Eight others just to the north of those were designated as contiguous counties.

The counties closest to the Champaign-Urbana area are Clark, Crawford and Jasper counties, all of which are contiguous to the disaster areas.

The amended rules effectively:

— Reduce by 40 percent the processing time for designating a county as a disaster area.

— Reduce the interest rate for emergency loans from 3.75 percent to 2.25 percent.

— Reduce the rental payment by producers on Conservation Reserve Program acres used for emergency haying or grazing.