Desperate times facing Farmers in Midwestern US
By Joe Dales, Farms.com
Farmers across North America are looking out over their fields these days and are concerned that the plants are withering and dying because of the lack of rainfall. Weather experts are saying this is the worst drought in nearly 25 years and it is spreading across the Midwestern USA, a major grain producing area. The hardest hit areas including - Southern Illinois and Indiana, farmers are cutting and baling the dead corn plants in an attempt to salvage some of the feed value for cattle and dairy cows.
The United States Department of Agriculture has released a series of reports that are predicting the corn and soybean crops will yield less grain then was anticipated earlier in the spring. The reduced supply of corn and soybeans leads to increases in major agriculture commodity futures prices which are determined on the commodity exchanges.
“It is still too soon to predict how this drought will affect the price of food consumers pay.” Richard Volpe, a USDA Food Markets Research Economist, pointed out, “The government has already predicted food prices will increase this year by as much as 3.5%. It won’t be clear until the fall when all of the damage is known, how much the crop loss will add to that.” A rule of thumb is that food prices typically climb about 1 percent for every 50 percent increase in average corn prices.”
The price of meat will likely see some of the largest increases because grain is used to feed livestock and is the major cost component to produce a pound of meat. “When corn and soybean prices rise, eventually the price of meat must increase, “says beef producer Amanda Brodhagen.
Corn is widely used as a food ingredient in products such as the sweetener in soft drinks, cereals, corn starch and in sauces but it only accounts for a small percentage of the cost to produce such products.
In the meantime, farmers will be looking skyward in the hopes that rain will quench the thirst of their dying crops.