Brutal cold slows U.S. farming and meat business

By Karl Plume and Christine Stebbins

CHICAGO, Jan 6 (Reuters) - The coldest weather to hit the central United States in two decades disrupted grain and livestock shipments throughout the nation's farm belt on Monday, curbed meat production at several packing plants and threatened to damage the dormant wheat crop.

The near-record cold followed a winter storm that dumped more than a foot of snow in some areas over the weekend, closing roads in northwest Indiana and preventing workers from reaching pork plants, grain elevators and processing plants in the northern half of the state, industry sources said.

The Illinois River remained open to barge traffic, but ice buildup created bottlenecks at the waterway's eight locks and along a slow-moving stretch of the river near Peoria, slowing the flow of grain to export terminals at the Gulf of Mexico.

The arctic blast pushed morning lows to -4 to -10 degrees Fahrenheit (-20 to -23 Celsius) in the top wheat state of Kansas, while other wheat states of Nebraska and Colorado had morning lows in the -12 to -20 F range, MDA Weather Services forecaster Don Keeney told Reuters.

"The central Plains wheat region will have some damage, and the southeast Midwest crop will see damage tomorrow, given the forecast for the cold to move into southern Illinois, southern Indiana and northern Kentucky," Keeney said.

The frigid temperatures even reached as far south as Oklahoma, another big wheat state, but most of it was spared the extreme cold, with lows in the single digits.

"A third of the Plains Wheat Belt saw limited damage, while 15 percent saw significant damage," Keeney said.

Snow cover protects dormant wheat when temperatures dip below zero and persist for four hours or more. Without sufficient snow cover, damage to exposed wheat can prevent the crop from reaching its full potential next summer.

While western and northern Kansas have about 2 inches of snow on the ground, there is little snow cover in Nebraska.

In contrast, the soft red wheat crop in northern Illinois into southern Michigan is protected with more than a foot of snow after weekend storms dumped up to 12 inches in sections of the upper Midwest.

But the upper Midwest is facing life-threatening cold, with lows of -15 to -20 F and wind chills of -30 to -40 F, according to local forecasts.

ICY RIVER

The extremely cold weather, expected to last into at least Tuesday, will speed ice buildup on the Illinois River.

Grain shippers rely on the inland waterways system to haul grain from Midwest farms to export terminals at the Gulf Coast, where some 60 percent of U.S. corn, soybeans and wheat exit the country.

"Tows are still passing through and all eight locks are open, but if there's not much traffic it could freeze up solid until the traffic start moving again. Boats will continue to move and try to keep the path open," said Mike Zerbonia, operations manager with the U.S. Army Corps of Engineers' Illinois River project.

The U.S. Coast Guard has so far only restricted traffic along a 10-mile stretch near Peoria to one-way, due to heavy ice buildup that has narrowed the shipping lane.

The Army Corps also restricted barge tow widths at Illinois River locks to 105 feet, five feet narrower than normal due to the icy conditions.

REDUCED PORK PRODUCTION

At least five pork processing plants in Illinois, Indiana and Ohio are expected to be closed for at least part of Monday while hog dealers in the top producing state of Iowa said farmers were not hauling their animals to market because of the cold, livestock dealers said.

Top U.S. meat processor Tyson Foods will not operate its Logansport, Indiana, plant, spokesman Worth Sparkman said. The plant has a daily slaughter capacity of 15,300 head, according to the National Pork Board.

Cargill Inc, the third largest U.S. meat producer, will operate its Beardstown, Illinois, pork plant and its Wyalusing, Pennsylvania, beef plant on a limited basis on Monday as hazardous roads reduced livestock deliveries and kept some employees from reaching the plants, spokesman Michael Martin said.

The Beardstown plant has a daily slaughter capacity of 19,400 hogs and the Wyalusing plant can process up to 1,800 head of cattle per day, according to industry data.

Indiana Packers Corp in Delphi confirmed in an email that the plant will be closed on Monday and will resume operations on Tuesday. The plant has 2,000 employees and can slaughter as much as 17,000 hogs per day.

The U.S. Department of Agriculture estimated Monday's hog slaughter at 323,000 head, down from 439,000 a week ago and 428,000 a year ago, and pegged the day's cattle slaughter at 110,000 head, versus 130,000 a week ago and 125,000 a year ago.