Despite Record Drought, Farmers Expect Banner Year After the Midwest's driest summer in decades, farmers are assessing their losses and gains. Despite the hit many farms took, the Agriculture Department predicts record high farm income this year, thanks to higher prices and federally subsidized crop insurance.

Despite Record Drought, Farmers Expect Banner Year

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From NPR News, this is NPR's ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Robert Siegel.

Summer is over, but in parts of the U.S. the drought is not. Recent rains have helped. Still, the federal government classifies more than a fifth of the country as being in extreme or exceptional drought. In parts of the lower Midwest, water-starved crops have collapsed, the cost of feed has jumped.

But as Frank Morris of member station KCUR explains, famers aren't faring as badly as you might expect.

FRANK MORRIS, BYLINE: Neill's & Sons Dairy near Freeman, Missouri, looks pretty lush after a rain especially with cows crowding around for a drink of fresh water.


MORRIS: But all summer, Julie Neill watched the pastures wither and the business unwind.

JULIE NEILL: I honestly probably wanted to quit several times, just hang it up. But there was a lot to that decision. It was giving up a lifetime of everything that we have made.

MORRIS: Farmers with animals got the worst of the drought this year. Feed grew scarce and extremely expensive. The Neills had to borrow heavily, about 50 grand, just to keep their cows alive. Neighbors lent encouragement and heavy equipment. The farm was in intensive care.

NEILL: Honestly, I think it was on more death row. It just didn't feel like it was ever going to end.

MORRIS: For the Neills, relief came with a name.

ERIC NEILL: I wouldn't have picked Isaac. I would not have picked Isaac for a savior's name.

MORRIS: He's talking about the remnants of Hurricane Isaac. The storm slammed Louisiana last month but quenched large parts of Arkansas and Missouri.

NEILL: We had five and a quarter inches of rain here. We had no runoff. Within four days, we had grass growing and my cows started grazing.

MORRIS: Today, Neill's cows stand in a field of bright green, knee-high grass, gobbling their fill and making milk. But just 45 miles west of here, out near Baldwin, City, Kansas, Isaac petered out, bringing too little rain too late in the season to help with Luke Ulrich's corn crop.

Ulrich pilots his big, green combine, harvesting the last of this year's ragged crop.

LUKE ULRICH: There's your last eight rows of 2012, Frank.

MORRIS: That's it.

ULRICH: That's it.

MORRIS: It's not much, less than half the normal yield. Pretty typical, though, across the lower Midwest where the drought torched billions of bushels of corn. Yet, Jason Henderson with the Federal Reserve says farmers as a whole are doing well.

JASON HENDERSON: Here in 2012, USDA expects net farm incomes to reach their second highest level on record.

MORRIS: Record drought and near record farm income?

DAVE SWENSON: It seems completely illogical.

MORRIS: Dave Swenson teaches economics at Iowa State University. He says the explanation has several parts. For one...

SWENSON: Crop prices, grain prices, oil seed prices, wheat prices, prices are very, very high.

MORRIS: Which means that farmers relatively unscathed by the drought through irrigation or good luck are having a banner year. Even guys like Roy Berghaus, who farms the hills near Farmington, Missouri, figures he'll make ends meet, though he lost two-thirds of his corn crop.

ROY BERGHAUS: Price is the only salvation, you know? Hopefully, it will keep the operation going.

MORRIS: While Berghaus doesn't carry government-subsidized crop insurance, most other Corn Belt farmers do, and it's another major boost for farm income. It will likely pay out upwards of $15 billion this year. Jordan Ulrich, back in Kansas, will get some of that money.

JORDAN ULRICH: Definitely, the crop insurance helps, but everybody's situation is different.

MORRIS: Ulrich and his brother Luke, for instance, have especially high overhead. They rent farm land and carry a lot of debt. Crop insurance won't pay the mortgage. USDA is offering very low interest emergency loans for farmers in their situation. And Luke Ulrich says there's another factor.

ULRICH: Probably the only bright spot - and I use that term loosely as well - is we can't figure out how these soybeans stayed alive.

MORRIS: Newer hybrid soybeans surprised a lot of farmers this year. Plants that hung on are expected to produce a fairly decent and very lucrative crop.

While this year's drought is far from over, U.S. agriculture seems to be coping better than expected. Farmers aren't being forced off the land in huge numbers. And many will go into next year with the tools they need to keep producing enormous amounts of food, weather permitting.

For NPR News, I'm Frank Morris in Kansas City.

SIEGEL: And that story came to us from Harvest Public Media, a public radio reporting project that focuses on agriculture and food production issues.

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