George Floyd protests recall earlier tensions, promises of economic change

By Howard Schneider

WASHINGTON (Reuters) – In November 2015, the shooting death of Jamar Clark by Minneapolis police touched off a debate on race and economic inequality that challenged the city’s progressive image and led local corporate leaders to back efforts at better sharing the spoils of a booming Midwestern state.

Five years later, the killing of George Floyd has reopened those wounds and highlighted a growing concern nationally: The last few years of economic growth saw gains for lower-income families, but any hope for a durable narrowing of economic gaps may have been short-circuited by the coronavirus pandemic and the subsequent economic crash falling heavily on minorities.

Floyd’s death in police custody in Minneapolis last week may have been a catalyst for an anger that has spawned protests nationwide, but it was in effect the third major shock to hit in as many months, said Tawanna Black, chief executive of Minnesota’s Center for Economic Inclusion (CEI), a group that grew out of those corporate promises of five years ago.

Before the recent surge in joblessness, “we saw the employment gap closing rapidly,” Black said. But “you were connecting people to low-wage jobs, and now you have displaced them. … What I am hopeful of is that we not just solve for criminal justice, but what’s required to get economic and social justice.”

It is complex, to be sure. Tension over police treatment of blacks has simmered through good economic times and bad. But for the economy, the course of the pandemic and the financial fallout highlights how little has changed over a decade of growth that seemed to hold out at least the possibility of progress on narrowing racial economic divides.

Median family income growth finally started rising in 2015, but median family income for blacks remains about 61% that of whites. In Minneapolis, it is even lower at about 44%.

A 2009-2020 bull market for stocks and rising home values have done little to improve overall wealth among African Americans, who comprise around 13% of the U.S. population but account for 4.2% of household net worth, according to Federal Reserve data. The figure in 1989 was 3.8%.

For Hispanics, it is even worse, with more than 18% of the U.S. population holding just 3.1% of household wealth.

(Graphic: Race gaps persist – )

‘NO PROGRESS’

Both groups have suffered an outsized blow from layoffs triggered by business closures meant to control the spread of the coronavirus and the crash in demand among consumers holed up

at home.

According to federal data from February to April, Hispanic employment fell by more than 25%. For blacks, the figure was 17.6%, more modest but still above the 15.5% for whites.

It is part of a “last-hired, first-fired” dynamic familiar to labor economists and considered one of the reasons behind the lack of progress in narrowing wealth and income gaps. In this case, it is also driven by the skewed nature of the coronavirus economic shock, which hit hardest among lower-paid service jobs in the restaurant and hospitality industry where minorities form a larger share of the workforce.

The shock has been no different in Minnesota from in parts of the Deep South, according to a Reuters comparison of federal employment data by race alongside demographic information on unemployment claimants submitted by the state in April.

African Americans made up about 5.7% of Minnesota’s employed workforce in 2019 but more than 8% of those who filed for unemployment in April.

Still predominantly white, with a self-effacing culture captured by writer Garrison Keillor’s “Prairie Home Companion” former radio show, the demographics around Minneapolis, the state’s largest city, have shifted quickly in recent decades. It

has for example opened itself to refugees from Somalia. The city is now about 20% black and 10% Hispanic.

Minnesota’s rural areas voted heavily in 2016 for Republican Donald Trump, while the state as a whole went for Democrat Hillary Clinton owing to strong support in the Minneapolis area.

That city is also home to a healthy list of large U.S. companies, many of them homegrown national brands like Target Corp, that are known for their civic boosterism and support for efforts like the one spearheaded by CEI’s Black.

The question now is whether the dislocation caused by the coronavirus, rising joblessness and the death of Floyd prompts lasting change.

Those firms will be central to deciding the pace of the economic recovery, and the nature of the jobs available in the economy that emerges.

After the last recovery did so little to change wealth and income dynamics, and the coronavirus showed the gulf between workers who were buffered from the crisis and those who were not, Black said it was time to think about the nature of the labor market that will emerge from here.

Many of the jobs “will not come back. Do we train people for tech jobs? Automation-resilient jobs?” she said. Over the last decade, “we made no progress.”

(Reporting by Howard Schneider; Editing by Dan Burns and Peter Cooney)

Minneapolis police officer charged with murder in George Floyd case

By Carlos Barria

MINNEAPOLIS (Reuters) – The white Minneapolis policeman who pinned an unarmed black man with a knee to the throat before the man died was arrested and charged with murder, a prosecutor said on Friday, after three nights of violent protests rocked the Midwestern city.

Derek Chauvin, the officer seen on a bystander’s cellphone video kneeling on George Floyd’s neck on Monday before the 46-year-old man died, has been charged with third-degree murder and manslaughter, Hennepin County Attorney Mike Freeman told a news briefing.

“He is in custody and has been charged with murder,” Freeman said of Chauvin. “We have evidence, we have the citizen’s camera’s video, the horrible, horrific, terrible thing we have all seen over and over again, we have the officer’s body-worn camera, we have statements from some witnesses.”

The cellphone footage showed Floyd repeatedly moaning and gasping while he pleaded to Chauvin, kneeling on his neck, “Please, I can’t breathe.” After several minutes, Floyd gradually grows quiet and ceases to move.

Chauvin and three fellow officers at the scene were fired on Tuesday from the Minneapolis Police Department. The city identified the other officers as Thomas Lane, Tou Thao and J Alexander Kueng.

Freeman said the investigation into Chauvin – who, if convicted, faces up to 25 years in prison on the murder charge – was ongoing and that he anticipated charges against the other officers. He said it was appropriate to charge “the most dangerous perpetrator” first.

Earlier on Friday, Minnesota Governor Tim Walz called for an end to the violent protests, which have included arson, looting and the burning down of a police precinct, while promising a reckoning with the racial inequities behind the unrest.

“None of us can live in a society where roving bands go unchecked and do what they want to, ruin property,” Walz said. “We have to get back to that point of what caused this all to happen and start working on that.”

The protests, which threatened to stretch into a fourth night, have been driven in part by a lack of arrests in the case.

Responding to a reporter’s question about why the officers were not arrested sooner, Freeman stressed that charges in similar cases would typically take nine months to a year.

“This is by far the fastest we’ve ever charged a police officer,” said Freeman. “We entrust our police officers to use a certain amount of force to do their job, to protect us. They commit a criminal act if they use that force unreasonably.”

(Reporting by Lisa Lambert in Washington, Brendan O’Brien in Chicago, Nathan Layne in Wilton, Connecticut, Andrew Hay in Taos, New Mexico, and Peter Szekely in New York; Editing by Paul Simao and Jonathan Oatis)

Four Minneapolis policemen fired after death of unarmed black man

By Eric Miller

MINNEAPOLIS (Reuters) – Four Minneapolis police officers were fired on Tuesday over the death of an unarmed black man seen in a video lying face down in the street, gasping for air and groaning, “I can’t breathe,” while a white officer knelt on his neck for several minutes.

Hours after the officers’ dismissals were announced, thousands of protesters filled the streets around the scene of Monday evening’s deadly incident in a boisterous but peaceful rally. Many in the crowd wore facial coverings to protect against spread of the coronavirus.

But the gathering took an unruly turn around dusk as police in riot gear fired tear gas and non-lethal bean-bag rounds into the crowds while protesters hurled water bottles and other projectiles, the Minneapolis Star-Tribune reported.

Local news footage showed some demonstrators vandalizing the outside of a police precinct station and a squad car. The unrest appeared to have dissipated after dark as rain fell.

The day began with Minneapolis police chief Medaria Arradondo telling reporters that the Federal Bureau of Investigation had opened an inquiry at his request into the fatal arrest caught on video the night before.

Mayor Jacob Frey said at the same news briefing that regardless of the investigation’s outcome, it was clear the death of the man in custody, later identified as George Floyd, was unjustified, and that race was a factor.

“Being black in America should not be a death sentence,” the mayor said. “For five minutes we watched as a white police officer pressed his knee into the neck of a black man. For five minutes. When you hear someone calling for help, you are supposed to help.”

The mayor later announced the termination of four officers on Twitter, saying, “This is the right call.”

‘I CAN’T BREATHE’

The case was eerily reminiscent of the 2014 killing of Eric Garner, an unarmed black man in New York City, who died after being put in a police chokehold and telling the officers, “I can’t breathe.”

The officers involved in Monday’s encounter were responding to a report of a forgery in progress, and found a man fitting the suspect’s description, Floyd, aged in his 40s, in a car, according to a police department account.

After Floyd got out of the car, the department said, there was a physical altercation between the officers and Floyd. Floyd was handcuffed, and he appeared to be in medical distress, according to police.

Cell phone footage taken by an onlooker does not show what precipitated the confrontation. It opens with Floyd lying beside the rear wheel of a vehicle, with a white officer pinning him to the street by pressing a knee into Floyd’s neck.

Floyd can be heard repeatedly moaning and gasping while he pleads, “Please, I can’t breathe, please, man,” as bystanders gather around, growing increasingly agitated and shouting at police to let him up. After several minutes, Floyd gradually grows quiet and ceases to move.

An ambulance took the suspect to the hospital, where he died a short time later, police said. No weapons were involved, and no officers were hurt in the incident, according to police.

In the case of Garner, he was placed in a banned chokehold by a white police officer trying to arrest him for illegally selling loose cigarettes on the street.

Garner’s dying words, “I can’t breathe,” became a rallying cry for the Black Lives Matter movement calling attention to a wave of African-Americans and other minorities who died at the hands of police using unjustified lethal force.

Attorney Benjamin Crump, retained by Floyd’s family, said in a statement that officers’ “abusive, excessive and inhumane use of force cost the life of a man who was being detained by the police for questioning about a non-violent charge.”

(Reporting by Eric Miller in Minneapolis; Writing and additional reporting by Steve Gorman in Los Angeles; Additional reporting by Brendan O’Brien in Chicago; Editing by Bill Tarrant, Leslie Adler and Gerry Doyle)

U.S. states from Minnesota to Mississippi to reopen despite health warnings

By Susan Heavey

WASHINGTON (Reuters) – U.S. states from Minnesota to Mississippi this week prepared to join other states that have eased coronavirus restrictions to try to revive their battered economies, although some business owners voiced reluctance in the face of health warnings.

Colorado, Montana and Tennessee were also set to allow some businesses deemed nonessential to reopen after being shut for weeks even as health experts advocated for more diagnostic testing to ensure safety.

Georgia, Oklahoma, Alaska and South Carolina previously restarted their economies following weeks of mandatory lockdowns that have thrown millions of American workers out of their jobs.

The number of known U.S. infections kept climbing on Monday, topping 970,000 as the number of lives lost to COVID-19, the highly contagious respiratory illness caused by the virus, surpassed 54,800.

Public health authorities warn that increasing human interactions and economic activity may spark a new surge of infections just as social-distancing measures appear to be bringing coronavirus outbreaks under control.

New Jersey Governor Phil Murphy said in a Twitter message late on Sunday that he would announce a roadmap for “responsibly reopening” the state at a Noon ET (1600 GMT) news conference on Monday.

Although unprecedented stay-at-home orders have put many businesses in jeopardy, many owners have expressed ambivalence about returning to work without more safeguards.

‘I WOULD STAY HOME’

“I would stay home if the government encouraged that, but they’re not. They’re saying, ‘Hey, the best thing to do is go back to work, even though it might be risky,’” Royal Rose, 39, owner of a tattoo studio in Greeley, Colorado, told Reuters.

The state’s Democratic governor, Jared Polis, has given the green light for retail curbside pickup to begin on Monday. Hair salons, barber shops and tattoo parlors may open on Friday, with retail stores, restaurants and movie theaters to follow.

Business shutdowns have led to a record 26.5 million Americans filing for unemployment benefits since mid-March and the White House has forecast a staggering jump in the nation’s monthly jobless rate.

President Donald Trump’s economic adviser Kevin Hassett told reporters on Sunday the jobless rate would likely hit 16% or more in April, and that “the next couple of months are going to look terrible.”

On Monday, White House adviser Peter Navarro said the Trump administration is focusing on protocols to keep U.S. factories open as the country grapples with the coronavirus outbreak, including screening workers for potential cases.

“You’re going to have to reconfigure factories,” Navarro told Fox News. “You’re going to have to use things like thermoscanners to check fever as they come in.”

Trump was scheduled to hold a video call with the country’s governors on Monday afternoon before the White House coronavirus task force’s daily briefing.

The rise in the number of U.S. cases has been attributed in part to increased diagnostic screening. But health authorities also warn that testing and contact tracing must be vastly expanded before shuttered businesses can safely reopen widely.

(Reporting by Susan Heavey, Nicholas Brown and Brendan O’Brien; Writing by Maria Caspani; Editing by Howard Goller)

 

Methodist church plans to split over gay marriage, clergy: church officials

By Rich McKay

(Reuters) – The United Methodist Church plans to split into two denominations later this year, church officials said on Friday, a schism that follows years of contention over whether the church should end its ban on gay marriage and ordination of gay clergy.

The plan, if approved at the church’s worldwide conference in Minneapolis in May, would divide the third-largest U.S. Christian denomination into two branches: a traditionalist branch that opposes gay marriage and the ordination of lesbian, gay, bisexual and transgender clergy, and a more tolerant branch that will allow same-sex marriage and LGBT clergy.

The split would affect the denomination globally, church leaders said. The United Methodist Church lists more than 13 million members in the United States and 80 million worldwide.

The U.S. Supreme Court legalized same-sex marriage throughout the nation in 2015, but that decision applies only to civil, not religious, services. Some denominations, including the Episcopal Church and certain branches of Judaism, have sanctified same-sex unions, while others including the Roman Catholic Church and Southern Baptist Convention, have declined to do so.

A council of Methodist bishops in Washington, D.C. called Friday’s move the “best means to resolve our differences.”

New York Conference Bishop Thomas Bickerton, part of the group that drafted the plan, said this was a way to reach an amicable separation.

“The protocol provides a pathway that acknowledges our differences, respects everyone in the process, and graciously allows us to continue to live out the mission of making disciples of Jesus Christ,” he said.

(Reporting by Rich McKay in Atlanta; Editing by David Gregorio)

Fire in Minneapolis leaves 250 homeless on Christmas Day

By Steve Gorman

(Reuters) – Fire swept a hotel apartment building that provides transitional housing for the poor in downtown Minneapolis early on Wednesday, leaving about 250 people homeless on Christmas morning, city officials said.

No deaths or serious injuries were reported in the four-alarm blaze. Three residents with minor injuries were taken to a hospital for evaluation, and several others were treated at the scene for smoke inhalation, officials said.

The fire erupted before dawn on the second floor of the three-story Francis Drake Hotel before spreading to the third floor and attic area of the brick building, city Fire Chief John Fruetel told reporters outside the complex.

The cause was unknown, Fruetel said, adding that he expected it would take fire crews until Thursday to fully extinguish the blaze.

Television news footage showed flames leaping through the roof amid thick smoke as firefighters poured streams of water onto the burning structure.

“I would estimate that the building is going to be a total loss,” assistant fire chief Bryan Tyner told Minnesota Public Radio News.

With temperatures hovering just above freezing, the city immediately brought in transit buses to provide emergency shelter and warmth for displaced residents, Mayor Jacob Frey told a news briefing, adding that municipal agencies were working with the American Red Cross and other authorities to provide food, longer-term shelter, clothing and other needs for the evacuees.

“These are people’s lives, this is their home. They’re concerned about everything from a wallet or a phone so they can get in touch with a loved one on Christmas, to where are their babies going to get formula,” Frey said, choking up with emotion.

The Francis Drake, which opened in 1926 as a luxury hotel later converted to residential units, provides overflow shelter space for homeless families, as well as temporary lodging for individuals who lack permanent housing in Minnesota’s largest city, municipal and county officials said.

Drake Hotel resident Jason Vandenboom said he was awakened by his wife when fire alarms sounded and he ventured out of their unit to see “a guy coming down the hallway, just pounding on the doors, saying, ‘There’s a fire, we gotta get out of here.'”

Gazing out to another wing of the building, “I saw flames shooting at least about 10, 15 feet (3, 4.5 meters) up,” he told CBS affiliate WCCO-TV. Vandenboom said he then ran back to his room and told his wife, “‘Yeah, we gotta go now.’ … It was bad.”

(Reporting by Steve Gorman in Culver City, Calif.; Editing by Leslie Adler and Sandra Maler)

Frozen harvest leaves bitter taste for U.S. sugar beet farmers

By Rod Nickel

HALLOCK, Minn. (Reuters) – Weather during harvest season in the U.S. Red River Valley, a fertile sugar beet region in Minnesota and North Dakota, has to farmers felt like a series of plagues.

Rain and snow pelted crops in September and October. That was followed by a blizzard, and then warm temperatures that left fields a boggy mess. Next came a deep freeze, ruining the underground sugar beet crop, and dealing a harsh blow to farm incomes.

“I can take a couple of perils from Mother Nature and after that I’m on my knees,” said Dan Younggren, 59, who was unable to harvest 500 acres (200 hectares) of sugar beets, or 40% of his plantings near Hallock, Minnesota. “We’ve never had a situation like this.”

Extreme weather has hampered planting and harvesting of corn, soybeans, and other crops throughout 2019 across the United States and Canadian farm belts.

But in Minnesota and North Dakota, which accounted for 56% of the U.S. sugar beet acres this year, the freeze is a double whammy.

Sugar beet growers’ contracts with processors, which operate as farmer-owned cooperatives, require those who leave unharvested acres to pay a fee to the cooperative so it can pay its bills in leaner years.

Younggren’s five-generation farm must pay American Crystal Sugar a fixed cost of $343 for every unharvested acre, totaling roughly $171,500 to be docked from payments for beets he did harvest.

On Monday, the U.S. government authorized the import of an additional 100,000 short tons of Mexican refined sugar due to the harvest issues. The United States is the world’s third-largest sugar importer after Indonesia and China, buying 2.8 million tonnes in 2018-19, according to the U.S. Department of Agriculture.

Producers Western Sugar Cooperative and United Sugars Corp issued force majeure notices this month. Other processors also face a difficult winter.

At American Crystal Sugar’s factory in East Grand Forks, Minnesota, farmer David Thompson circled the yard in his pickup, surveying snow-covered mounds of sugar beets.

“Normally this time of year you would see piles everywhere,” said Thompson, who left 170 acres unharvested. “This is heart-wrenching for me to see the yards this empty.”

American Crystal, the largest U.S. sugar beet processor, did not respond to requests for comment.

Cargill Inc, one of the largest U.S. refined sugar suppliers, has adequate supply of cane sugar for its Louisiana refinery, but may import more sugar if customers need it due to the poor beet harvest, said Chad Cliff, the company’s global sugar product line lead.

Crop insurance will compensate farmers for some of their yield loss, but there is no program that will allow them to recoup the fixed cost fees, said Thompson.

It is too soon to know the extent of crop damage, said Luther Markwart, executive vice-president of Washington-based American Sugarbeet Growers Association. Farmers could potentially seek assistance under the Wildfires and Hurricanes Indemnity Program, which farmers have not used before for field crops damaged by rain and cold, he said.

In towns across the Red River Valley, the sugar farm disaster has left few people untouched.

“It’s going to affect everyone from the grocery store to the restaurant to the liquor store,” said Chip Olson, the part-time mayor of Drayton, North Dakota, population 760.

Many of the town’s residents work in its Crystal Sugar plant, and usually have seasonal jobs until late spring. This year the work will likely run out months earlier, Olson said.

The combination of rains, thaws and the freeze made the beets unusable. Wade Hanson, who grows sugar beets with his family near Crookston, Minnesota, was unable to harvest half of the farm’s plantings, or 500 acres, this year.

“My dad always told me, ‘we always get the beet crop off.’ This year it didn’t happen and that was pretty shocking.”

(Reporting by Rod Nickel in Hallock, Minnesota; Editing by David Gaffen and Marguerita Choy)

Thrown from mall balcony, Minnesota boy now walks ‘perfectly,’ attends school

(Reuters) – A little boy, critically injured when a stranger threw him off a balcony at a Minnesota mall last spring, is back in school and walking normally, after numerous surgeries, physical therapy and an outpouring of public support, according to a family friend.

Landen Hoffman fell nearly 40 feet (12 meters) onto the concourse of the Mall of America in Bloomington last April when he was 5 years old. He was randomly picked up and thrown from the third floor by a man who police said was venting his anger.

When he finally came back home in August, his legs were uneven and he was limping, family friend Noah Hanneman said on Friday on the GoFundMe page that raised more than $1 million for Landen’s medical expenses from more than 29,000 donors.

After much physical therapy, he is now walking “perfectly,” Hanneman said.

“He loves being back to school and going to kindergarten at the same school his twin brother and sister go to,” Hanneman wrote. “He gets out of the car every morning happy and blows kisses all the way in! He’s a strong, happy boy.”

The man who admitted throwing Landen from the balcony, 24-year-old Emmanuel Aranda, is serving a 19-year prison term he accepted in June after pleading guilty in Hennepin County District Court to attempted first-degree murder.

Aranda told investigators he had been visiting the mall for years to try to talk to women, but was rejected and became angry. He said he initially intended to kill an adult, but chose the boy instead.

Despite the horrific ordeal, Hanneman said Landen has “good memories” of the friends, family members and medical professionals who helped him in his recovery.

“Landen knows people all over the world are praying for him and he loves all the cards he keeps getting in the mail,” he wrote. “There was one bad person, but from that came millions of Good people!”

(Reporting by Peter Szekely in New York; Editing by David Gregorio)

Christian couple can sue over Minnesota same-sex marriage video law

FILE PHOTO: A rose is seen on a giant rainbow flag at a pro same-sex marriage party after couples registered their marriages in Taipei, Taiwan May 24, 2019. REUTERS/Tyrone Siu

By Jonathan Stempel

(Reuters) – A federal appeals court on Friday revived a lawsuit by a Minnesota couple challenging a state law requiring that their video production company film same-sex weddings, which they say violates their Christian beliefs.

In a 2-1 decision, the 8th U.S. Circuit Court of Appeals in St. Paul, Minnesota, said Angel and Carl Larsen can try to show that the law violates their rights to free speech and freely exercise their religious beliefs under the First Amendment of the U.S. Constitution.

Circuit Judge David Stras, an appointee of President Donald Trump, called videos by the St Cloud, Minnesota couple “a medium for the communication of ideas about marriage,” and said the state’s law “is targeting speech itself.”

The court ordered U.S. District Judge John Tunheim in Minneapolis to decide whether the Larsens and their Telescope Media Group deserve a preliminary injunction against the law, which subjects violators to fines and possible jail time. Tunheim had dismissed the lawsuit in September 2017.

Minnesota Attorney General Keith Ellison, whose office defended the law, did not immediately respond to requests for comment.

“Angel and I serve everyone,” Carl Larsen said, in a statement provided by his lawyers at Alliance Defending Freedom. “We just can’t produce films promoting every message.”

The case is among several in recent years where private business owners or individuals invoked their religious beliefs to deny services to same-sex couples.

In June, for example, the Washington Supreme Court ruled for a second time against a Christian florist for refusing to sell flowers to a same-sex couple for their wedding, setting up a potential clash at the U.S. Supreme Court.

Meanwhile, Kentucky county clerk Kim Davis in 2015 cited her religious beliefs in refusing to issue marriage licenses to same-sex couples.

Same-sex marriage became legal in Minnesota in 2013, and nationwide in 2015.

The Larsens said they wanted to use their talents to honor God, including by producing wedding videos promoting marriage as a “sacrificial covenant between one man and one woman.”

Minnesota objected, saying the Larsens had to produce videos of same-sex weddings as well as opposite-sex weddings, or else produce none.

But in Friday’s decision, Stras said the Larsens could try to show that Minnesota law interfered with their message “by requiring them to say something they otherwise would not.”

He distinguished antidiscrimination laws targeting conduct and only incidentally affecting speech, calling it “unquestionably” acceptable to require an employer to remove a “White Applicants Only” sign.

Circuit Judge Jane Kelly dissented, saying the majority’s approach could support treating customers differently based on sex, race, religion and disability.

“Nothing stops a business owner from using today’s decision to justify new forms of discrimination tomorrow,” she wrote. “In this country’s long and difficult journey to combat all forms of discrimination, the court’s ruling represents a major step backward.”

The case is Telescope Media Group et al v Lucero, 8th U.S. Circuit Court of Appeals, No. 17-3352.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and David Gregorio)

Floods stall fertilizer shipments in latest blow to U.S. farmers

FILE PHOTO: The contents of grain silos which burst from flood damage are shown in Fremont County Iowa, U.S., March 29, 2019. REUTERS/Tom Polansek

By Karl Plume

CHICAGO (Reuters) – Farm supplier CHS Inc has dozens of loaded barges trapped on the flood-swollen Mississippi River near St. Louis – about 500 miles from the company’s two Minnesota distribution hubs.

The barges can’t move – or get crucial nutrients to corn farmers for the spring planting season – because river locks on the main U.S. artery for grain and fertilizer have been shuttered for weeks. High water presents a hazard for boats, barges and lock equipment.

Railroads have also been plagued by delays from winter weather and flooding in the western Midwest, further disrupting agricultural supply chains in the nation’s breadbasket.

FILE PHOTO: Flood damage is shown in this aerial photo in southwestern Iowa, U.S., March 29, 2019. REUTERS/Tom Polansek/File Photo

FILE PHOTO: Flood damage is shown in this aerial photo in southwestern Iowa, U.S., March 29, 2019. REUTERS/Tom Polansek/File Photo

The transportation woes are the latest headache for a U.S. agricultural sector reeling from years of slumping profits and the U.S.-China trade war, and they threaten to cut the number of acres of corn and wheat that can be planted this year.

The shipping delays follow months of bad weather in the rural Midwest, including a “bomb cyclone” that flooded at least 1 million acres (405,000 hectares) of farmland last month and a record-breaking April snow storm.

“Our barges are a long way from where we need them in the upper Midwest,” said Gary Halvorson, senior vice president of agronomy at CHS. “We really don’t think that any rail line will be at their preferred service rate until summer.”

Agricultural retailers rely on barges and trains to resupply distribution warehouses across the farm belt. But river flooding has delayed the seasonal reopening of the northern reaches of the Mississippi River to barge traffic. The latest National Weather Service river forecasts suggest one of the river’s southernmost locks could remain closed until at least the first week of May.

FALLING PROFITS, PRODUCTION

Reduced or poorly timed fertilizer applications can hurt yields, potentially denting this year’s U.S. farm profits, which are already predicted to be about half of their 2013 peak, according to the latest U.S. government forecast. Delayed shipments can also mean lost sales for farm suppliers and higher demurrage penalties, or late-return charges, on stalled barges and rail cars.

CHS, one of the largest publicly traded U.S. agriculture suppliers, said this month cited poor weather as a key reason for a $8.9 million drop in agricultural profits during its fiscal second quarter.

Agribusiness giant Archer Daniels Midland Co said severe weather and flooding would cut its first-quarter profit by $50 million to $60 million while DowDuPont said flooding would slash first-quarter profits in its agriculture division by 25 percent.

Fertilizer producers such as Nutrien Ltd, Mosaic Co and Yara International also lost sales due to bad weather in the fourth quarter of last year and first quarter of this year. Mosaic announced last month that it would cut U.S. phosphate fertilizer production by 300,000 tonnes for the spring season due to poor weather and large inventories left over from the fall.

Farm retailers such as CHS and privately held Growmark may see additional losses through the spring season as the tighter planting window limits the application services they provide, according to CoBank analyst Will Secor.

SCRAMBLING TO PROTECT CROP YIELDS

Farmers are not expected to skip nitrogen fertilizer applications entirely, which would cause yields to drop by about half, according to Purdue University agronomist Bob Nielsen. But higher nutrient costs could have growers applying less-than-optimal amounts.

Some farmers could shift from corn to soybeans, which can be planted later and require fewer fertilizer applications. But soybeans will continue to face uncertain demand as long as the U.S. and top buyer China remain locked in a trade war.

“Right now my plan is to plant more corn because the price of beans is so low,” said Don Batie, a farmer near Lexington, Nebraska.

The weather problems started last autumn, a period when some farmers treat fields after harvesting in preparation for the following spring. But wet weather prevented fall fertilizer applications, and an exceptionally snowy winter in many areas slowed or halted winter field work.

More recent storms have threatened to narrow the limited spring window for field treatments.

“When you add to it this re-supply constraint of not being able to move barges up the Mississippi, it puts us in a precarious position,” said Kreg Ruhl, manager for crop nutrients division at Growmark, the country’s third-largest agriculture retailer in terms of revenue.

PRICES RISING

Retail fertilizer prices have started rising in parts of the Midwest and are likely to rise further as local supplies are depleted and retailers scramble to resupply.

In Iowa, the top U.S. corn producing state, the price of the common fertilizer urea was up 20 percent in late April from a year ago, and anhydrous ammonia was up 27 percent. Both hit their highest early spring levels in three years, according to U.S. Department of Agriculture data.

Without timely barge deliveries, CHS will lean on its rail network that brings imported supplies from Galveston, Texas, to any of the 29 rail hubs it owns in places like Sioux Falls, South Dakota; Marshall, Minnesota; and Minot, North Dakota.

Higher U.S. fertilizer prices and strong demand from other countries could help producers such as Nutrien, Mosaic and Yara recover some recent profit weakness in upcoming quarters.

For farmers and fertilizer retailers, however, uncertain fertilizer deliveries will likely weigh on agricultural markets through the planting season.

“We’re doing our very best to make sure that our retail network is supplied,” said CHS’s Halvorson.

(Reporting by Karl Plume in Chicago Editing by Brian Thevenot and Caroline Stauffer)