Article

by Carey Gillam

WELTON, Iowa - Bob Bowman runs his hand over a slender green corn leaf here on his Iowa farm, and sighs.

"This corn should be as high as my head right now, and it is only waist high," he says, as a cool morning breeze belies the 90-degree Fahrenheit temperatures forecast to descend by afternoon in Welton, Iowa.

"If we get rain real quick here, we might be down 25 percent," said Bowman of prospective losses from the persistent dryness. "If we don't get rain in the next two weeks, it will be a lot more serious."

Bowman farms 2,200 acres in east-central Iowa in one of the state's highest production areas. There may not be much to brag about this year, however.

After getting off to a record-fast planting pace following the mildest winter in decades in the Midwest that promised a record harvest, the corn crop got into trouble when rains became scarce, especially during pollination when yields are set. And a scorching heat wave hit the state recently.

Taking a cue from a deteriorating crop, the U.S. Department of Agriculture on Wednesday cut its estimate of this year's corn production in the United States, the world's top grower and exporter, by 12 percent, slashing the average yield by a whopping 20 bushels to 146 per acre.

Prices of corn futures at the Chicago Board of Trade have surged 40 percent this summer in the wake of the worst drought in about 25 years in the Midwest grain belt.

In Iowa, the top U.S. corn-growing state, there is still time for many fields to make at least half to three-quarters of their production potential. But some are already too far gone.

All of Iowa is now considered as "abnormally dry," compared to none of the state a year ago, the U.S. Drought Monitor reported on Thursday.

About 13 percent of the state is now in severe drought, with the worst-hit areas in the east-central section and southeastern corner of the state.

The entire eastern half of Iowa is in at least moderate drought, according to the Drought Monitor.

Drought in the Midwest worsened over the past week, with a third of the nine-state region in severe to exceptional drought in the week ended July 10, up from about a quarter of the region a week earlier, the Drought Monitor said.

The toll that the drought is taking on the U.S. corn crop is so severe in some areas of the Midwest that farmers are writing off whole fields, or fear they will soon have to.

Corn is pollinating now -- at least trying to. The plants need roughly an inch of water a week to grow well. Spotty rain showers have dotted the region, but overall Iowa, and the entire Midwest is well short of normal rainfall.

Neal Keppy, a 35-year-old corn grower in Eldridge, Iowa, said he's never seen conditions this dire. Of his 1,200 acres of corn, he has lost hope for roughly half the crop.

One field is so bad he has stopped treating it with fungicides and insecticides, essentially letting disease and insects take what the drought has not yet killed.

"I have never seen anything like this," he said.

Land in this part of Iowa goes for $10,000 an acre or more and is known for its rich soils and good rainfall. The area typically boasts some of the highest production in the state. But this year things are starkly different.

"I see a whole lot more stalks without ears on them than do have ears," said Keppy. "We need to get some rain."

(Additional reporting by Michael Hirtzer and Karl Plume in Chicago; Editing by K.T. Arasu and John Picinich)