U.S. drought good news for P.E.I. soybean farmers

A drought affecting crops in the U.S. Midwest could be good news for soybean farmers on the Island.

Despite weeks of dry and hot weather on P.E.I., the conditions don't compare to the Midwest where crops are wilting in one of the worst droughts in half a century.

Corn, soybeans, and grains are drying up, making Island plants more valuable every day. Prices for soybeans have jumped from $400 to $500 a tonne in the last month.

Since weather conditions like the drought are unpredictable they can send costs soaring, said Neil Campbell of theP.E.I. Grain Elevators Corporation.

"More news out of the U.S. If any fields have to start getting destroyed, ploughed down, so to speak, that could drive the speculators to drive the market even higher," said Campbell.

That's good news for soybean grower David Mol.

"My banker is certainly going to expect me to start paying down some of my loans," he said.

Many farmers on P.E.I. have already signed a contract to sell half their crop at a negotiated price, for most, that's around $400 a tonne. But by harvest time the rest of the crop could be worth more.

However, this isn't good news for livestock farmers who buy soybeans for feed.

"When there's high prices for cereals and soybeans, the guy at the other end in the livestock business is getting hit. You know, it's costing him a lot more to produce his meat," said Campbell.

Tuesday night brought showers, but they weren't enough to make farmers happy.

"If the yield's not there, we won't have any beans to speculate at this high price and that's my concern," said Mol.

Island farmers say they'll need close to 20 millimetres of rain every two weeks for the rest of the summer to keep their yield up.