18th July, 2012
Weather forecasters see no end in sight to the worst US drought in five decades, a blistering heatwave that has wilted crops across America’s crucial breadbasket and sent grain prices soaring.
Farmers are mulling cutting down crops and thinning livestock herds as meteorologists said the country’s central breadbasket, the world’s largest source of both soybeans and corn, faces another month of stifling, rainless heat.
Top US agriculture official Tom Vilsack announced Wednesday he was designating 39 more counties in eight states as “natural disaster areas,” making farmers there eligible for low-cost emergency loans. Nearly 1,300 counties across 29 states have been designated natural disaster areas this year.
Vilsack also met with President Barack Obama Wednesday to review options to deal with the drought.
Meanwhile, a World Bank official said they were watching to see how the drought could impact global food supplies, after sharp surges in food prices in 2008 and 2010 dealt harsh blows to poor, food-importing nations.
“While it’s too early to be overly concerned, the Bank is monitoring the situation closely for potential impacts on our clients,” said Marc Sadler, team leader for the World Bank’s Agricultural Finance and Risk Management Unit.
“Global stocks in most of the tradable grains are lower now than they have been historically… we don’t have as much in the larder as we used to.”
More than 60 percent of the continental United States has been under drought and extreme heat conditions since June, according to Mark Svoboda of the National Drought Mitigation Center in Lincoln, Nebraska.
Temperatures have topped 100 degrees Fahrenheit (38 Celsius) for days in a row in many places, with the central plains running three to four degrees Fahrenheit above normal this month.
Svoboda said the drought was as tough as the worst in the 1930s and 1950s, although those benchmarks were multi-season, multi-year disasters while the current situation only dates to May.
But, he pointed out, the timing of the lack of rain and the heat has been particularly devastating, coming just at the peak of the growing season with the epicenter the central US farm belt east of the Rocky Mountains all the way to the Atlantic coast.
It has hit corn, soybeans, and crops like hay needed to feed cattle especially hard.
Farmers are now looking at cutting their losses — chopping down fields of half-mature, ear-less corn to feed the stalks to cattle.
“The jury is still a little bit out on it. We are in that process right now, making that decision,” said Steve Foglesong, who raises cattle and farms corn in Astoria, Illinois.
“From the road the corn looks green, but there are no ears on it.”
Foglesong said the next two weeks will be crucial, but weather forecasters were not encouraging.
“The worst of the drought is right in the middle of the nation, the corn belt. It’s just been bone dry,” said Carl Erickson, a meteorologist at Accuweather.
“Unfortunately across the central plains, the Mississippi valley, it looks like the overall pattern will remain in place for the rest of the month and into August,” he said.
“Once you get into a pattern like this, it almost feeds on itself.”
Joseph Glauber, chief economist for the Department of Agriculture, said their surveys show that 38 percent of the corn crop, and 30 percent of the soybean crop, are considered in “poor” or “extremely poor” condition.
That compares to 9 percent and 8 percent respectively this time last year.
In the last big drought, in 1988, corn yields fell by more than 20 percent, Glauber noted. Although the department will wait until early August before reaching a conclusion about the crops, he said: “It’s evolving as we speak. Every week these crop conditions have gotten worse.”
Corn prices have soared by 50 percent since May, while the rate for soybeans, which develop later than corn and might be able to bear up under another few weeks of rainless conditions, has surged 26 percent.
Ironically, in a way, beef and other meat prices have fallen. Glauber said some ranchers facing higher feed prices appear to be reducing their herds, pushing livestock into the market.
Foglesong said that in addition, from what he can tell the heat wave has been so intense around so much of the country that consumers have curtailed their summer barbecues, also hitting demand for steaks, ribs and other products.
Over the longer term, Glauber said, the herd reductions will mean tighter supplies and higher prices for meat on top of the grains.
Svoboda said that the crops aren’t the only problem. The drought has already fed devastating wildfires in the west, and if it keeps on, he predicts cities will start running into limits on their water supplies, which could lead to water use controls.