CENTREVILLE - The rains of the past two weeks came too late to rescue Maryland's grain crop. This year's drought, one of the worst in more than a century, will cost many farmers up to 75 percent of their income and put an economic pinch on rural businesses throughout the state.
"We've had more rain in the past two weeks than we had all summer," said Bruce Leaverton as he pointed toward a muddy, 400-acre field of soybeans. "But it was no help."
Leaverton farms nearly 2,300 acres just south of this Delmarva town. Bean plants that should be waist-high and fuller than a bushel basket this time of the year barely reach above the 4-inch stubble of winter wheat harvested before the soybeans were planted.
Instead of harvesting 30 bushels of beans from each acre planted, Leaverton will be lucky to get 10 bushels an acre. "Ten is being optimistic," he said. "In some fields it won't pay to harvest the beans."
Doing some quick calculations in his head, he estimates that instead of banking $30 to $50 from each acre of beans planted, he will lose about $80 per acre this year.
Multiply that loss by 400 acres and it means a loss of $32,000. It also provides a glimpse into the financial plight of farmers across the state.
The economic hardship that growers are feeling this year doesn't stop at the end of their farm lanes. It trickles into the small towns where farmers buy their groceries, farm equipment and furniture, get their hair cut and go out to dinner.
It's being felt in Pocomoke City, where Ken Wilmer, owner of the Upper Deck Restaurant, reports that business is off 10 percent this year.
And in Snow Hill, where Central Implement Co., a farm equipment store that has served the area since 1948, is set to close at year's end and lay off its 14 employees.
"The drought and poor commodity prices - which were at a 20-year low in recent years - were too much for us," said Jeff Chapman, president of Central Implement. "Farmers quit buying big tractors. They didn't have the money. It was a hard decision, but we have to pull the plug."
Sales slowed
At Queen Anne's Tractor Co., in the town of the same name, salesman Tom Eason said business slowed considerably when the rains stopped in June.
"It was like somebody turned the faucet off," he said.
Farmers quit buying $200,000 combines, and homeowners put off their purchases of $2,000 riding mowers.
A short distance away, Gene Boyle, vice president of Boyle Brothers Inc., which processes seeds for planting, said, "We will be lucky if we do 20 percent of our normal business this year."
"That's not enough to make payment on our bills or to make payroll," he said. The company has 14 workers.
"The drought has been much worse than I thought it would be," he said. "Two years like this will put us out of business."
Blair Carmean, manager of Carmean Grain Co., in Ridgely, said sales are off 50 percent. The company buys grain from farmers and sells it to Delmarva poultry companies.
Carmean said business isn't sufficient to keep his three grain-hauling trucks on the road this year. He has laid off the drivers. In addition, he said, he will not be hiring the five people he usually takes on during harvests, his busiest times of the year.
'Not seeing revenue'
"The economic impact of the drought doesn't end with me," he said. "If the trucks are not running, they don't need service, they don't need fuel, and they don't need new tires. That means the people in town are not seeing that revenue."
Wilmer, president of the Pocomoke City Chamber of Commerce, said, "If many of the other business owners [in town] wanted to be honest about it, they would say business is off a little bit."
Kenneth M. Bounds, a vice president of MidAtlantic Farm Credit, the state's largest agriculture lender, said most grain farmers are going to be disappointed this year when their checks come in.
"Their income is going to be off at least 50 percent and probably more like 75 percent," he said.
Although agriculture is an important part of Maryland's rural economy, Bradley H. Powers, the recently retired deputy secretary of the Maryland Department of Agriculture, said the current farm crisis is not going to result in boarded-up windows at small-town stores.
He echoed other state agricultural officials, including Thomas Fretz, dean of the College of Agriculture and Natural Resources at the University of Maryland, College Park, when he said, "Main Street is going to feel the pinch of the difficult times down on the farm, but it won't be enough to put stores out of business."
Powers said rural Maryland is different than farming regions in the Midwest. "Because of the state's diversified economy, even small-town stores and banks are not totally dependent on local farmers for much of their business."
"[But the farmers] ... are hurting," said Powers. "There is no doubt about that, but they have been through tough times in the past and most are going to survive this drought."
Bounds said MidAtlantic Farm Credit has sent letters to its 9,000 or so customers expressing a willingness to work with them to help make ends meet and to better manage their risk in the years ahead.
"It is during these difficult times that our loan officers earn their paychecks," said Bounds. "They will be working with borrowers as partners to help them get through this."
Ability to pay
Burned by the adverse publicity of foreclosure auctions during the big farm shakeout of the mid-1970s, when hundreds of farms were forced out of business, Farm Credit and other banks serving farmers, began basing their loans on a farmer's ability to repay them rather than on the value of their farms. This has just about eliminated farm foreclosures.
Disaster relief
Other help is on the way.
Steve Connelly, executive director of the Maryland Farm Service Agency office in Columbia, which administers U.S. Department of Agriculture policy in the state, said Friday that 21 of the state's 23 counties have been designated federal drought disaster areas.
The federal designation allows farmers to apply for low-interest loans. To qualify, he said, farmers have to have been turned down by at two commercial lenders.
Connelly said such loans are a last resort and usually go to farmers "who are really in big trouble."
In addition, he said, a disaster designation opens the door for Maryland livestock farmers to tap into a $750 million fund established by the USDA to help pay for animal feed.
Other aid could be coming from Congress. Against the wishes of President Bush, the Senate has passed a bill to provide nearly $6 billion in aid to farmers and ranchers hurt by the drought.
The House has yet to approve a drought disaster assistance bill.
Leaverton said he is "fundamentally opposed to government handouts" but admitted that they have been a big help to farmers in the past.
In many cases, such payments have been the difference in a farm's turning a profit and operating in the red.
Maryland has gone through three droughts in the past four years, said Tony Evans, the state Department of Agriculture's member on the Maryland Drought Emergency Board. He said the combination of droughts and 20-year-low grain prices in recent years "has pushed farmers up against the wall."
"These kind of years make you a little crazy," said Leaverton. "To be a farmer you have got to love what you're doing. You have got to love planting and seeing things grow."