Rain, Sweet Rain

This past Sunday was a glorious day.  The temperature never crossed north of 75 degrees and it rained intermittently all day long.  When you are in the throes of an epic drought a day like that ranks right alongside a World Series victory for the Chicago Cubs.  Okay, maybe we have not gotten to that point quite yet.

With the cutoff for data being Tuesday of the current week, the rains from last night and this morning are not included.  Nonetheless, things have not gotten worse for my part of the country:

That is a small consolation when you are characterized as being in an “extreme” drought condition.  It also highlights the persistent nature of drought once it takes hold.  Even a week of good rain does nothing to ameliorate the dry conditions other than making the people living through the drought a little less crazy.

On the Mississippi River, which carries a lot of the commodity inputs for America’s agro-industrial machine, the water levels have gotten so low that barge traffic is restricted or halted.  Just to give you an idea of the impact the Mississippi River carries 60 percent of the nation’s grain, 22 percent of the oil and gas and 20 percent of the coal.  Big deal, right?  As someone who grew up just north of La Crosse, Wisconsin it is hard to believe that the river has dropped low enough to stop barge traffic. 

The real question in eastern Iowa right now is with regard to the condition of the two staple commodity crops: corn and soybeans.  Most people, experts and amateurs alike, have written off a lot of the corn crop because the drought came at a critical time in the growth of a corn plant.  Furthermore, save for some advances in breeding, corn is a fairly inefficient plant in terms of moisture usage and extraction.  If you look at the price of corn you can see what the markets think about the harvest.  On August 16th, a bushel of corn was trading north of $8 for the first time that I can remember.  This is not quite the 52-week high, but it is up quite a bit from the 52-week low of just under $5.

At these prices the ethanol industry just has to be getting hammered.  I have not seen reports of ethanol plants being shuttered, but I cannot imagine that it is very profitable to keep these facilities in operation.

Apparently, the ditch weed in Iowa is doing okay.


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