Businesses Cross Fingers As Drought Lingers
Businesses Cross Fingers As Drought Lingers
Jul. 04, 1988
WING, N.D. (AP) _ Lumber dealer Frank Miller's sales one day totaled a box of nails. The John Deere dealer in Steele isn't selling anything bigger than lawnmowers. A farm supply store in Wilton is giving employees an extra day off each week.
Everywhere on Main Street North Dakota, businessmen and bankers are crossing their fingers as they watch the skies for an end to the lingering drought that analysts estimate could cost the state's economy as much as $3 billion this year.
''I've never seen anything like it before,'' said Miller, the 83-year-old owner of Wing Lumber, who says most of his patrons these days are just looking for a good conversation.
Business at the Cenex farm supply dealership in Wilton, 24 miles to the east, is off a third, said manager Ken Vetter. He's making ends meet selling air conditioners - the hottest item of this searing summer.
With crops wilting and cattle going to market, farmers aren't coming in for the fertilizer and pesticides they normally need in the spring and early summer. Baling twine is plentiful; with hay hard to come by, farmers are buying a fraction of the twine they usually do, Vetter said.
''I don't know how slow it's going to get,'' he said.
Economists and crop specialists at North Dakota State University estimated last week that the drought had destroyed $530 million worth of wheat and other grains and had cost livestock producers $225 million.
In addition, North Dakota farmers could lose as much as $473 million this year in government crop payments because of soaring commodity prices, the researchers said.
The price support payment for wheat, which was $1.53 a bushel before the drought, would drop to an estimated 38 cents.
Even with crop insurance and the sale of stockpiled grain, farmers would lose an estimated $867 million in income this year.
Experts hold out hopes of good yields from row crops such as beans and sugar beets in eastern North Dakota, where the drought is less severe. But grain crops have been destroyed in parts of western and north-central North Dakota and damaged seriously elsewhere.
Without significant government help, those losses would ripple through a state economy that has been crippled since the early 1980s by low crop and oil prices.
''In the long run, it's a people problem,'' said Arlen Leholm, an economist at North Dakota State University. ''We're going to be translating these sort of losses in our agriculturally dependent areas into a lot of human suffering.''
Nowhere will the impact of the drought be felt more keenly than on the Main Streets of the state's small towns, where merchants depend almost exclusively on farm business.
They already were struggling to survive because of the state's tight economy and the increasing trend by farm families to shop in the state's bigger cities.
Wilton, population 950, has lost a drug store and hardware store in recent years. Little is left in Wing for its 200 residents except for the Cenex dealership and a general store, bar and cafe.
''Any business that does business with farmers is going to see reduced profits,'' said Wilbur McGinnis, president of First State Bank of Wilton.
The drought ''is going to have a real hard effect on Main Street,'' said Joseph Lamb, president of the state-owned Bank of North Dakota.
''No matter what the farm subsidies are ... obviously (farmers) are not going to have that extra money to buy items that are sold on Main Street.''
What could save Main Street this fall and winter is a combination of rain, government help, high grain prices - and the tenacity that has kept them going through lean economic times before.
''No question it will be tough on the small businesses, but there are a lot of them out there who are survivors,'' said McGinnis.
''They've learned to survive no matter what. We're hoping they'll get through this period.''
Many farmers could make up for some of the crop income they will lose this year by selling grain they have in storage. Even if they have to pay off government loans to secure the grain, they could make a profit.
In the meantime, the Reagan administration is being pressed to plow savings from the government's price support programs back to farmers to make up for crop losses.
If farmers who lost their crops get the government deficiency payments they expected before the drought, the state would gain $400 million, officials say.
While the wheels of government turn, Main Street waits to see what the rest of the summer and fall will bring, but optimism remains even as the drought hangs on.
Implement dealers make do repairing tractors instead of selling new ones. Vetter's Cenex dealership puts employees to work installing the central air conditioning systems for which it has a waiting list of five customers.
Miller keeps opening up his lumberyard each day as he has for the past 20 years.
''It's just tough and it's going to be that way for a while,'' he said.