By Christine Stebbins
CHICAGO (Reuters) - Just one year ago Jeff Scates saw the worst flooding on his southern Illinois farmland since 1937. Today, Scates is watching his corn fields shrivel from the driest season in 24 years.
"We've gone from one extreme to the other, from being flooded on three-quarters of the farm now to a drought," said Scates, 42, who with his family members farms 15,000 acres of corn, soybeans and other crops along the Kentucky-Indiana border where the Ohio and Wabash Rivers meet.
Scates said his corn is still in better shape than many fields of his neighbors, who farm sandier soils that do not retain moisture. Moisture is needed to develop a strong root system to sustain plants in the hottest months of July and August.
He says this growing season is reminiscent of the summer of 1988, when the central Corn Belt had significant crop losses. Field conditions were hot and dry early this spring, similar to what happened 24 years ago when local crops, especially corn, were disseminated by lack of summer rains.
"Clearly it's one of these nasty droughts. If it doesn't surpass 1988, it certainly is going to rival it or be among the so-called great droughts we've had in the past 30 years," said Bob Nielsen, extension agronomist at Purdue University, who recalled his time as a crop advisor in 1988 to Indiana farmers.
U.S. corn prices have soared 17 percent this month as day after day of hot dry weather persists in the heart of the Midwest, where Iowa and Illinois alone produce one-third of all U.S. corn and soybeans.
The markets are "on fire" as concerns mount that the United States, the world's top exporter of these two food and feed crops, will be hit with crop losses. That would hit not only the U.S. government budget and insurance companies with crop insurance payments but also spur a fresh round of world food price inflation, experts say.
Concerns right now are zeroed in on corn, which is planted before soybeans and is just entering its key growth stage of pollination -- the period when the corn plant starts producing the grain kernels. In the Midwest, the pollination will be under way for the next four weeks. There is a direct correlation between pollination and final yields, with the success of pollination determined by the level of moisture and amount of heat the corn plant receives.
USDA on Monday rated 56 percent of the U.S. corn crop as good/excellent, the lowest rating in that category in late June since 1988. That year, U.S. farmers produced only 4.9 billion bushels of corn, a full 33 percent below the government's initial May estimate of 7.3 billion bushels. Currently, USDA is forecasting a record U.S. corn crop of 14.8 billion bushels for 2012. That estimate came on June 12, before the latest drought pressures.
Among the Midwest states hardest hit by drought at the moment are Illinois and Indiana, which rank second and fifth in corn output. In each state, less than 40 percent of the young corn crop is now rated in good to excellent condition.
Counter-balancing this concern for overall U.S. production are much better rated crop conditions currently in other key areas of the Midwest including top producer Iowa and Minnesota, which just received some rain, and Nebraska where about 40 percent of the corn is irrigated.
Nielsen said 2012 is shaping up as "a perfect storm" for Indiana that will threaten this year's corn crop. His current worry: persistent drought conditions coupled with a forecast for extreme heat and little moisture over the next seven to 10 days as Indiana's corn crop pollinates.
The National Weather Service is calling for above-normal temperatures and below-normal precipitation for the next six to 10 days from Ohio to Nebraska, southward to Missouri. Highs on Wednesday were 100 F in Des Moines, Iowa; 102 in Omaha; and 93 in Champaign, Illinois.
SUMMER OF 1988 VERSUS 2012
Crop watchers say that despite similar fears 2012 is far from an exact match of 1988. Conditions were drier, for example, for the April to June quarter in 1988 compared with 2012, so the stress was earlier in the crop cycle, crop experts say.
This year the extreme drought conditions so far are in a smaller chunk of the belt, specifically the southern tips of Indiana and Illinois and southeast Missouri. These areas currently have the same rain deficits as in 1988. Rain in July will be absolutely key to the corn crop's fate: in 1988 rainfall during the spring to early summer was some 8 to 10 inches below normal, according to the Midwest Climate Center.
Heat also matters, as the corn plant stops growing when temperatures go above 90 degrees. So far, 2012 has been hotter across a broader swathe of the Midwest than 1988. For instance, the average temperature from April to June in Indiana has been nearly 2 degrees above 1988.
"It does not mean that conditions cannot become as serious as they were in 1988," said Elwynn Taylor, climatologist for Iowa State University. "It's just that most of the damage to the crop in 1988 was done in May and June. This year June will be ending with the majority of the crop still considered in good condition."
Emerson Nafziger, an agronomist with the University of Illinois, said his biggest fear is that many farmers in the southern areas of the Midwest have already thrown in the towel and halted fieldwork, irrigation, spraying and so on.
"Rain is the only thing we need on this crop. There isn't a lot of things we can go out and do to fix it," Nafziger said. "People aren't willing to spend any money if they are already into an insurance claim, and many of them are."
There are reports were corn in southern Illinois is only 2 to 3 feet tall and tasseling, he said. "That's a field that is not going to produce a yield."
(Reporting by Christine Stebbins. Editing by Peter Bohan and Bob Burgdorfer)