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Grain Profits Withering

Posted to MichiganNow.org on Monday, August 20, 2012

INTRO: Drought has hurt farmers throughout the Midwest. The University of Illinois published a report saying that state will lose 33% its corn this year. The USDA’s August report shows Michigan is losing 25% of its corn crop. It’s projected to get 114 bushels of corn an acre. It normally has 145. Michigan Now’s Chris McCarus just rode a bike from Flint through the tiny farming towns of the thumb.

“In this area, Cass City, we’re in Tuscola County. We’re in Nick’s Restaurant here at 8 in the morning. We’re looking at a giant grain elevator. What goes in there?”

“Corn, wheat and soybeans.”

Some grain elevators are cooperatively owned. Larry Merchant owns these 130 foot tall silos all by himself. He’s got no one to share the losses. But he won’t tell me that directly. I saw the office doors are closed and there’s no people or trucks. So Merchant is having coffee over here across the street with some friends.  I ask him:

“How’s the season going and what are the issues here?”

“Lot better now that it rained.”

“How much rain have you had?”

“About 7 inches.”

“That’s a lot isn’t it?”

“Yeah in a week.”

“Is that too much?”

“Yep.”

“So what did it do?”

“It’s hurting our beans.”

“What’s it doing to the beans?”

“They’re dying.”

Merchant likes to joke but isn’t happy right now. He says there’s nothing in his grain elevator.

“It’s empty. How come? Is that good/bad?”

“It’s bad if you need any cash.”

“So how does that work?”

“How does it work..it works like a bank. You put your grain in and you take it back out.”

According to FarmNetServices.com, Michigan has 140 grain elevators. Agriculture is the state’s second largest industry. Michigan State University Economist Jim Hilker says watching it shrink helps no one. And that means higher food prices in the long run.

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Reporter Chris McCarus at the southern entrance to Bad Axe

Reporter Chris McCarus at the southern entrance to Bad Axe

Farmer and grain elevator owner Larry Merchant sits inside Nick's Restaurant in Cass City, August 16, 2012.

Farmer and grain elevator owner Larry Merchant sits inside Nick's Restaurant in Cass City, August 16, 2012.

Merchant Grain LLC, 6210 Main St, Cass City, MI

Merchant Grain LLC, 6210 Main St, Cass City, MI

Corn along Cass City road east of M-53 in Tuscola County. The thumb isn't as bad as the southern lower peninsula, says MSU agricultural economist Jim Hilker.

Corn along Cass City road east of M-53 in Tuscola County. The thumb isn't as bad as the southern lower peninsula, says MSU agricultural economist Jim Hilker.

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