Local Drought Creates Global Concerns

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It doesn't look like our recent rainfall helped drought-affected crops.

On Monday, September 16th, 2013, the U.S.D.A. released its weekly crop report. Only 33% of Iowa's soybeans and 35% of Iowa's corn are expected to be in "good to excellent" condition this week, which was the same as last week. In Illinois, 50% of soybeans are considered to be in "good to excellent" condition, compared to 49% the week prior.

Corn in Illinois is looking a little better, but it's unchanged in Iowa over the last two weeks. Only 35% of Iowa's corn is rated "good to excellent" right now. Illinois corn went from 55% in "good to excellent" condition last week to 56% this week.

Soybeans are the focus of a global event taking place in the Quad Cities this week. Starting Monday, September 16th, 2013, the U.S. Soy Global Trade Exchange is bringing together 500 traders from 41 countries at the RiverCenter in Davenport, Iowa.

"This event is really good to coin us with the buyers that we have and to service the buyers we have," says Riverside, Iowa Farmer, Larry Marek. "If there are concerns they have about quality or transportation or sustainability, all those things are very important to us."

Soybean production in the U.S. is very important to people inside and outside of the U.S. For example, Europe has a soy deficit of 35 million tons and countries like Ireland can't grow protein, so they import 100%. from farmers like Marek.

"We just keep growing and that's our business," says Marek. "We grow to feed people."

Therefore, with 41.79% of Iowa considered to be in a "severe" drought and 39.32% of Illinois considered to be in a "moderate drought" by the U.S. Drought Monitor as of September 12th, 2013, both Iowa and Illinois as well as places like Ireland are affected.

"The weather really for farmers and for the feed industry is vital and it affects all of us," says Deirdre Webb, Director of the Irish Grain and Feed Association. "We were taken a little bit by surprise last week. Soy for us went from about 317 euros a ton to 480, but that's what the modern markets are like. They're driven by the weather."

"Corn needs rain in July and soybeans need rain in August," says Marek. "And for the first time in my 53 years in farming, I didn't get any rain in August."

Marek says Sunday's rain may have helped some of his crops that are still green, but for the ones that aren't the wet weather may have been too little, too late. The same goes across Iowa, where the U.S.D.A. expects a 2% reduction in this year's soybean yields compared to last year.

However, any rain at this point is good, says Marek, and Webb agrees.

"We're hoping with this rain and this cooler weather that maybe the heat will come out of the market," says Webb.

The U.S. Soy Global Trade Exchange runs through Wednesday, September 18th, 2013.

The U.S. Drought Monitor will take Sunday's rainfall into account when it releases its weekly report on Thursday, September 19th, 2013.