University Daily Kansan / Wednesday, June 29. 1988
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Drought slows sales of farm supplies, manufacturers say
The Associated Press
DES MOINES, Iowa — Just as farm equipment manufacturers were beginning to enjoy a rebound from an eight-year slump, the drought is turning customers cautious and cooling off the recovery.
Farmers who had been sizing up tractors and harvesting equipment have put off purchases while they wait to see if their crop will be saved by rain, said Bill Hassenfritz, owner of Hassenfritz Inc., a farm equipment dealer in the southeastern Iowa town of Mediapolis.
The "attitude of farmers was really quite high," he said. "I can't say (the drought) has completely blown that, but it has put it on hold."
Duane Hawbaker, parts manager at R&M Equipment Co. at Indiana, south of Des Moines, said farmers not only had held off new investments, but some also were putting off repairs on equipment for fall
harvests.
At Deere & Co. in Moline, III., spokesman Bob Combs said the manufacturer was watching the situation closely, but it was premature to gauge the drought's impact on the industry.
Before the drought, the farm equipment industry was showing significant gains from a severe slump.
The farm debt crisis of the early 1980s and the ailing agricultural economy had dealt a hard blow to manufacturers of farm equipment.
But a recovery in farm fortunes in the past two years has allowed farmers to reduce debts and make long-postponed purchases of equipment.
The Federal Reserve Bank of Chicago reported conditions for farm equipment sales were brightening in the first quarter of 1988, extending gains made in the second half of 1987.
significant slide backwards with respect to farm equipment sales." said George Dahlman, an analyst who follows the farm equipment industry for the Minneapolis securities firm of Piper Jaffrey & Hopwood Inc.
Then the drought it.
"In the near term it will mean a
"Farmers remembered they are only two years into the recovery and not over liquid." he said. "Those expenditures that don't have to be made, won't be made."
mature, won't be able. Dahlman said he expected the cautious attitude to remain for another six to eight months. But while the drought comes at a bad time for the industry, he said he didn't believe it would push manufacturers into bankruptcy.
spokesman Glen Christians at Massey Ferguson said, "The manufacturer that reaps the rewards this fall will be the one who targets those farmers who come out (of the drought) the best."
Damage from drought is spreading
The Associated Press
From Christmas trees to canned peas, trouble is brewing.
From cherries in the trees to honey from the bees, from tomatoes to potatoes, the suffocating drought in mid-America is taking its toll on scores of smaller crops that could result in huge losses for thousands of growers.
"It will affect just about everything grown from the Rocky Mountains east to Ohio . . . just about anything you consume that comes from these parts of the country," said Neil Harl, professor of economics at Iowa State University.
Although much of the spotlight about the drought's impact has focused on the grain and livestock industries, the worst dry spell since the dust bowl also threatens foods such as fruits and oysters.
"What everyone talks about programs, the USDA and the government," it's always corn, soybeans, wheat, cotton and peanuts," said Harry Foster, secretary-manager of the Red Tart Cherry Growers in Michigan. "Everybody else in the world that grows the 200 other things — they're sort of forgotten."
Michigan cherries used for baking, for juices and jams are suffering, he said, and the trees are beginning to show stress. Foster said about 150 million pounds of tart cherries — about 100 million pounds less than normal — will be harvested in the state in the next six weeks.
in be visited in the Midwest and Southeast, other crops hit
by the drought could shrink supplies, change diets and raise prices at grocery stores, restaurants and taverns.
The drought has pushed barley prices higher, increasing the possibility of higher beer costs. One analyst said if the price of barley goes through the roof, the price of beer could increase by up to 4 percent. In Louisiana, the low water level of the Mississippi River has allowed saltwater to move upstream, making oysters more susceptible to predators, and thereby endangering next year's crop, said Mark Chatry, marine laboratory director at Louisiana's Department of Wildlife and Fisheries.
a dike is being built to block the saltwater flow.
In north Georgia, some honey production has dried up. In Wisconsin, the pea crop has shrunk. And across the Midwest, thousands of Christmas trees planted this spring — which won't mature for several years — have been lost.
Gene Gress, who runs a Christmas tree farm with his wife in Polar, Wis., said he lost the 10,000 trees he planted this spring. Because of the maturation period, consumers most likely won't notice the losses until the mid-1990s.
Other Midwest growers already have talked of losses of 30 percent of this year's planting that could rise to 60 percent without rain in two weeks, said David Bauman, associate executive director of the National Christmas Tree Association.
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