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U.S. Sees Food Prices Rising From Severe Drought
WASHINGTON — The worst drought in the United States in nearly a half-century is expected to drive up the price of milk, beef and pork next year, the government said Wednesday, as consumers bear some of the brunt of the sweltering heat that is driving up the cost of feed corn.
Poultry prices are expected to rise more immediately, the government said in a report. It estimated that consumer price indexes for chicken and turkey would rise 3.5 percent to 4.5 percent later this year.
“The poultry category is the smallest animal category, and we expect to see more of an effect this year because they grow the fastest and will be first to be impacted by higher feed prices,” said Richard Volpe, an economist with the Department of Agriculture.
Figures released Wednesday by the department showed the largest percentage increase next year in its price indexes is expected for beef, a rise of 4 percent to 5 percent. The price of dairy products will increase 3.5 percent to 4.5 percent and eggs by 3 percent to 4 percent. Pork is expected to rise 2.5 percent to 3.5 percent.
The data is the first government estimate of how much prices could rise next year because of the drought that has gripped most of the country this summer, producing a lower-than-expected yield in corn, soybeans and several other commodity crops.
Corn is now selling at about $8 a bushel — up 50 percent from where it was priced at just a month ago. Soybeans are at a record price of almost $17 a bushel, up from $13, just two months ago. Food prices over all rise about 1 percent for every 50 percent increase in corn prices, because corn is used in dozens of products, according to the Agriculture Department. Corn can be found in everything from soft drinks to baby food, but nearly half of the crop is used to feed livestock.
“These are very corn-intensive operations,” said Bruce A. Babcock, an agriculture economist at Iowa State University, referring to raising livestock. “So customers will see an increase in the prices they pay for beef and dairy as the price of feed rises because of a drop in production.”
According to the government, 88 percent of the corn crop this year is now affected by the drought and 77 percent of the crop for soybeans, used in animal feed and some dairy alternatives, is affected.
The Agriculture Department slashed its estimate for what was supposed to be the largest corn harvest on record. The government cut its corn yield forecast to 146 bushels an acre for the year, the lowest corn yield since 2003; the outlook last month was for 166 bushels. The soybean yield is projected to be 40 bushels per acre, down from an estimate of 43.9 last month.
The most recent crop progress report shows that just 26 percent of the nation’s corn crop is rated either in good or excellent condition. About 45 percent of the crop is rated very poor or poor.
Soybean conditions remain slightly better. About 31 percent of the soybean crop is rated good to excellent, while 35 percent is rated very poor or poor.
Because of the dry weather, cattle farmers in a number of states have already started selling off or culling cattle because the drought has ruined grass for grazing and the price for corn for feed has skyrocketed.
Daniel R. Glickman, the agriculture secretary for former President Clinton, said that as farmers started culling or selling their herds, meat prices could fall because of a glut of beef on the market. “So in the short term, that’s good for customers,” Mr. Glickman said.
But the prices of beef, pork, chicken, eggs, and dairy are expected to rise significantly later in the year, most likely around November, agriculture economists say.
Ken Colombini, a spokesman for the National Corn Growers Association, a Washington trade group, said that not all of the rise in food prices could be attributed to a rise in corn prices. “A drop in corn production is a factor, but animals are under other stresses related to the drought as well,” Mr. Colombini said.
Ray Gilmer, a spokesman for the United Fresh Produce Association, said fruit and vegetable producers, for the most part, were not being affected by the drought. “Most of these operations are irrigated and the water is highly regulated so we are not having issues with our crops,” Mr. Gilmer said.
Despite the drought, many agriculture economists expect the farm economy to remain strong, mainly because most farmers participate in the federal crop insurance program.
Under the program farmers can obtain policies that cover drops in prices or yields.
In 2011, 265.7 million acres of crops were insured, with payouts of $10.8 billion because of weather related damage in Texas, Kansas and a few other states.
For a few lucky farmers, there could be an upside to the drought, Mr. Babcock said. “By collecting insurance but selling the remaining crops at the now-record prices, they could see a larger increase in revenue then they did last year,” he said.
http://www.nytimes.com/2012/07/26/business/food-prices-to-rise-in-wake-of-severe-drought.html?hp
Poultry prices are expected to rise more immediately, the government said in a report. It estimated that consumer price indexes for chicken and turkey would rise 3.5 percent to 4.5 percent later this year.
“The poultry category is the smallest animal category, and we expect to see more of an effect this year because they grow the fastest and will be first to be impacted by higher feed prices,” said Richard Volpe, an economist with the Department of Agriculture.
Figures released Wednesday by the department showed the largest percentage increase next year in its price indexes is expected for beef, a rise of 4 percent to 5 percent. The price of dairy products will increase 3.5 percent to 4.5 percent and eggs by 3 percent to 4 percent. Pork is expected to rise 2.5 percent to 3.5 percent.
The data is the first government estimate of how much prices could rise next year because of the drought that has gripped most of the country this summer, producing a lower-than-expected yield in corn, soybeans and several other commodity crops.
Corn is now selling at about $8 a bushel — up 50 percent from where it was priced at just a month ago. Soybeans are at a record price of almost $17 a bushel, up from $13, just two months ago. Food prices over all rise about 1 percent for every 50 percent increase in corn prices, because corn is used in dozens of products, according to the Agriculture Department. Corn can be found in everything from soft drinks to baby food, but nearly half of the crop is used to feed livestock.
“These are very corn-intensive operations,” said Bruce A. Babcock, an agriculture economist at Iowa State University, referring to raising livestock. “So customers will see an increase in the prices they pay for beef and dairy as the price of feed rises because of a drop in production.”
According to the government, 88 percent of the corn crop this year is now affected by the drought and 77 percent of the crop for soybeans, used in animal feed and some dairy alternatives, is affected.
The Agriculture Department slashed its estimate for what was supposed to be the largest corn harvest on record. The government cut its corn yield forecast to 146 bushels an acre for the year, the lowest corn yield since 2003; the outlook last month was for 166 bushels. The soybean yield is projected to be 40 bushels per acre, down from an estimate of 43.9 last month.
The most recent crop progress report shows that just 26 percent of the nation’s corn crop is rated either in good or excellent condition. About 45 percent of the crop is rated very poor or poor.
Soybean conditions remain slightly better. About 31 percent of the soybean crop is rated good to excellent, while 35 percent is rated very poor or poor.
Because of the dry weather, cattle farmers in a number of states have already started selling off or culling cattle because the drought has ruined grass for grazing and the price for corn for feed has skyrocketed.
Daniel R. Glickman, the agriculture secretary for former President Clinton, said that as farmers started culling or selling their herds, meat prices could fall because of a glut of beef on the market. “So in the short term, that’s good for customers,” Mr. Glickman said.
But the prices of beef, pork, chicken, eggs, and dairy are expected to rise significantly later in the year, most likely around November, agriculture economists say.
Ken Colombini, a spokesman for the National Corn Growers Association, a Washington trade group, said that not all of the rise in food prices could be attributed to a rise in corn prices. “A drop in corn production is a factor, but animals are under other stresses related to the drought as well,” Mr. Colombini said.
Ray Gilmer, a spokesman for the United Fresh Produce Association, said fruit and vegetable producers, for the most part, were not being affected by the drought. “Most of these operations are irrigated and the water is highly regulated so we are not having issues with our crops,” Mr. Gilmer said.
Despite the drought, many agriculture economists expect the farm economy to remain strong, mainly because most farmers participate in the federal crop insurance program.
Under the program farmers can obtain policies that cover drops in prices or yields.
In 2011, 265.7 million acres of crops were insured, with payouts of $10.8 billion because of weather related damage in Texas, Kansas and a few other states.
For a few lucky farmers, there could be an upside to the drought, Mr. Babcock said. “By collecting insurance but selling the remaining crops at the now-record prices, they could see a larger increase in revenue then they did last year,” he said.
http://www.nytimes.com/2012/07/26/business/food-prices-to-rise-in-wake-of-severe-drought.html?hp
Don't feel bad about not remembering names, etc; I'm not always the best at that either.........lol
It's absolutely devastating to do the planting, cultivating, etc only to watch the crops die and know there's nothing you can do about it. You've already spent the money (many have to borrow to buy the seeds, chemicals, fuel, etc) and you won't recoup it, but you still have to pay back the bank loan. Typically, a lot of farmers go out of business, following crop years like this.
I totally agree that it's time for a rain dance. Let's all join together.
It's absolutely devastating to do the planting, cultivating, etc only to watch the crops die and know there's nothing you can do about it. You've already spent the money (many have to borrow to buy the seeds, chemicals, fuel, etc) and you won't recoup it, but you still have to pay back the bank loan. Typically, a lot of farmers go out of business, following crop years like this.
I totally agree that it's time for a rain dance. Let's all join together.
I know you're not coming down on me but thanks for clarifying that anyway.
Of course what I heard was just one person and I wish I could remember names better but well, the old brain just doesn't retain things the way they once did.
I'd think even if you didn't lose out financially, it'd still feel horrible to do all that work only to watch your crop wither.
Time for a rain dance.
Of course what I heard was just one person and I wish I could remember names better but well, the old brain just doesn't retain things the way they once did.
I'd think even if you didn't lose out financially, it'd still feel horrible to do all that work only to watch your crop wither.
Time for a rain dance.
I tried to read it all, but it seems that they keep repeating the same things over and over about grazing and haying on land that's enrolled in CRP...... for those not enrolled in CRP, there is no option. As seen during our recent trip to the midwest, much of the corn is too dry to even cut for silage and corn stalks are not a commodity that's normally baled for later use.
"Vilsack also announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year." Yeah, with no crop, they won't have the money to pay for the insurance and if the insurance won't even help them pay the premium, it's even worse than when we had it.
A major difference I see is that crop insurance is now government subsidized - it wasn't when we farmed; and still they say farmers will be struggling to make the premium payments. That's scary.
OH - I'm not coming down on you, because you're posting what you heard/read; I just think that the whole idea of crop insurance, and saying farmers will "be okay", paints a "too rosy" picture. While we no longer farm in the midwest, we have friends and family who do...... and even though the government programs have changed, the end result is really no different than it ever was. No crop, no livelihood.
"Vilsack also announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums, as some farming families can be expected to struggle to make ends meet at the close of the crop year." Yeah, with no crop, they won't have the money to pay for the insurance and if the insurance won't even help them pay the premium, it's even worse than when we had it.
A major difference I see is that crop insurance is now government subsidized - it wasn't when we farmed; and still they say farmers will be struggling to make the premium payments. That's scary.
OH - I'm not coming down on you, because you're posting what you heard/read; I just think that the whole idea of crop insurance, and saying farmers will "be okay", paints a "too rosy" picture. While we no longer farm in the midwest, we have friends and family who do...... and even though the government programs have changed, the end result is really no different than it ever was. No crop, no livelihood.
Although I couldn't find the news program I did find this:
http://newsfeedresearcher.com/data/articles_b30/drought-crop-farmers.html#hdng0
http://newsfeedresearcher.com/data/articles_b30/drought-crop-farmers.html#hdng0
They were talking about the mid-west not California.
All I know is what I heard and they said it was federal crop insurance.
If it's been a while since you farmed maybe things have changed ?
If I can find a link to that story, I'll post it:)
BTW: We farmed in a lush small valley in California with drip irrigation. Our sheep were free range. The established orchard had no irrigation.
I can see how during a sustained drought things would have simply dried up.
All I know is what I heard and they said it was federal crop insurance.
If it's been a while since you farmed maybe things have changed ?
If I can find a link to that story, I'll post it:)
BTW: We farmed in a lush small valley in California with drip irrigation. Our sheep were free range. The established orchard had no irrigation.
I can see how during a sustained drought things would have simply dried up.
Unless things have changed drastically, with farming, I don't agree with your radio station.
When we farmed, we always had crop insurance........ more than once, we got hail storms that pounded our crops into the ground - our crop insurance gave us enough to cover the premium; we stood the loss, which included the cost of the seed, fertilizers, herbicides, fuel and everything else involved in putting in a crop, plus because we had no crops to sell, we had no income for those years. My husband and I both worked outside jobs to buy necessities for ourselves and our 2 children.
Additionally, prices don't stay high, if the market is flooded with product, so if next year is a good crop year, prices will be driven lower, because of higher yields.
Supply and demand. But of course, I'm looking at grain and livestock prices, because that's what I'm most familiar with. I understand that many farmers, especially, in CA, as in FL, grow fruit/vegetable crops, which wouldn't be fed to livestock like grain crops would be.
When we farmed, we always had crop insurance........ more than once, we got hail storms that pounded our crops into the ground - our crop insurance gave us enough to cover the premium; we stood the loss, which included the cost of the seed, fertilizers, herbicides, fuel and everything else involved in putting in a crop, plus because we had no crops to sell, we had no income for those years. My husband and I both worked outside jobs to buy necessities for ourselves and our 2 children.
Additionally, prices don't stay high, if the market is flooded with product, so if next year is a good crop year, prices will be driven lower, because of higher yields.
Supply and demand. But of course, I'm looking at grain and livestock prices, because that's what I'm most familiar with. I understand that many farmers, especially, in CA, as in FL, grow fruit/vegetable crops, which wouldn't be fed to livestock like grain crops would be.
I heard on the radio last night that the farmers are insured and will do alright financially.
They actually said if next year is better, weather wise it will be good because the prices will already be higher, indicating that even with improvement, prices will not drop. The report also noted that 40% of the corn is used for ethanol.
They actually said if next year is better, weather wise it will be good because the prices will already be higher, indicating that even with improvement, prices will not drop. The report also noted that 40% of the corn is used for ethanol.
I went out just yesterday about bought 275 gallons of milk, in anticipation of dairy prices going up.
Sure hope it keeps...
Sure hope it keeps...
Me and my silly conspiracy theories. Ethanol.... we grow a substantial amount of corn in this country and a good sized portion is going towards the production of ethanol. They add ethanol to gasoline, so why are gas prices going down and food prices going up?
Corn is finishing feed for beef. Because of drought and lack of feed, beet is selling early and cheap. Prices should be going the other way. Same can be said for chicken, but prices on chicken are creeping up there as well.
I think this is all some kindof diversionary tactic. Somebody above mentioned that we are a net food exporting nation. There is no need for this to be happening. We spend so much time taking care of the world at our own expense, and we do it time and time again. Sooner than later, (at least I could only hope) that we'd start worrying a liitle more about ourselves.
No, I don't want the world starving. I also don't want us as a nation to suffer because someone else is. There needs to be a priority shift in regards to this issue, but I am not for sure what it is.
The good news is this. If we are talking about this, we aren't talking about politics and the other issues at hand... diversionary tactic... I need more coffee or more common sense.
Corn is finishing feed for beef. Because of drought and lack of feed, beet is selling early and cheap. Prices should be going the other way. Same can be said for chicken, but prices on chicken are creeping up there as well.
I think this is all some kindof diversionary tactic. Somebody above mentioned that we are a net food exporting nation. There is no need for this to be happening. We spend so much time taking care of the world at our own expense, and we do it time and time again. Sooner than later, (at least I could only hope) that we'd start worrying a liitle more about ourselves.
No, I don't want the world starving. I also don't want us as a nation to suffer because someone else is. There needs to be a priority shift in regards to this issue, but I am not for sure what it is.
The good news is this. If we are talking about this, we aren't talking about politics and the other issues at hand... diversionary tactic... I need more coffee or more common sense.
http://www.msnbc.msn.com/id/48330810/ns/us_news-the_new_york_times/
'We've got the 'storm of the century' every year now,' says senior vice president at utility...
I live in a part of Texas that is in constant drought - either dry or drier. This lobe of the Chihuahua Desert is partially manmade, thanks to WW I.
When the price of meat went up during the First World War this part of the country was overgrazed. Because the topsoil was already thin, it didn't take but a couple rains to wash down to bare rock and sand. Munitions makers needed mercury to produce fulminate of mercury for primers and this was one of only two regions in the US known to produce cinnabar, so the trees were chopped down to make mine timbers and stoke the smelters. Lack of greenery started a self-sustaining cycle of hotter temperatures.
Manmade desertification.
Even today I know a couple people who raise vegetables for their family table, but it's a labor intensive proposition. You have to pick crops that can tolerate the high levels of magnesium sulfate in the water and move your garden every few years when the soil salts up.
'We've got the 'storm of the century' every year now,' says senior vice president at utility...
I live in a part of Texas that is in constant drought - either dry or drier. This lobe of the Chihuahua Desert is partially manmade, thanks to WW I.
When the price of meat went up during the First World War this part of the country was overgrazed. Because the topsoil was already thin, it didn't take but a couple rains to wash down to bare rock and sand. Munitions makers needed mercury to produce fulminate of mercury for primers and this was one of only two regions in the US known to produce cinnabar, so the trees were chopped down to make mine timbers and stoke the smelters. Lack of greenery started a self-sustaining cycle of hotter temperatures.
Manmade desertification.
Even today I know a couple people who raise vegetables for their family table, but it's a labor intensive proposition. You have to pick crops that can tolerate the high levels of magnesium sulfate in the water and move your garden every few years when the soil salts up.
Yes, you're right; one year some crops do well, the next it's something else and of course, we try to do the best we can, with the least water. The difference between what you and I might grow in a home garden, or small farm, and what farmers in the midwest, as well as other parts of the country, grow, is the sheer volume......... I don't know how many acres you and your husband had, but when we were farming, ourselves, we had a couple hundred acres, which is not irrigated without very expensive equipment, so when there was adequate rain, we had a good year; when there wasn't adequate rain, we tightened the belt - a lot. There are farmers, now, that farm thousands of acres and when those thousands of acres don't produce, we don't have food to buy, and the farmers have nothing to live on, because they have no crop to sell.
I agree with MrsP - food is already expensive enough, but I suspect it will get even more so.
I agree with MrsP - food is already expensive enough, but I suspect it will get even more so.
This is crazy...Food is already expensive enough..I can't imagine how much more expensive it can get...Good grief!
Part of the problem I think is due to the way things are grown with agribusiness.
Mono-cropping depends on one product.
When you have a small farm, you can diversify. My husband and I used to live on a farm. Although we mostly raised food for our family, there were often crops that did well one year, while others did not. One year we had more beans than we could use, another it'd be artichokes.
We learned how to grow our garden during drought conditions, on the least amount of water possible.
Of course, no water, no crops, no livestock.
Mono-cropping depends on one product.
When you have a small farm, you can diversify. My husband and I used to live on a farm. Although we mostly raised food for our family, there were often crops that did well one year, while others did not. One year we had more beans than we could use, another it'd be artichokes.
We learned how to grow our garden during drought conditions, on the least amount of water possible.
Of course, no water, no crops, no livestock.
We are a food exporting nation, but only if we can grow the food... what we saw in the midwest, which is a key area for food growth - think corn, oats, wheat, soy beans, beef, pork, poultry....... if crops fail to grow, there will be nothing to export.
Farmers, already, can't afford to buy grain to feed their livestock, which means they have to sell less than optimal livestock for horrifically, low prices..... if they don't get the grain crop this year, next year, they won't be able to raise livestock...... when meat and/or grains become scarce, the price goes up.. we all pay, because, not only does the price of meat go up, so does milk, cereal, eggs and everything else we eat.
I and my husband did farm in the midwest for quite a few years and we went through periods like this (though not so drastic).... if you can't grow the food for your livestock, you can't afford to feed the animals, so you have to sell them, at reduced prices.
People who have never lived on a farm and grown food to sell, might have a hard time understanding; but when weather conditions prevent farmers from growing crops, nobody prospers.
We see that here, in our area of FL, where citrus is a big crop...... We only have an orange tree and a grapefruit tree, now, but very day, I go out and see more fruit on the ground, than was there yesterday, because we haven't had enough rain, so the trees simply drop their fruit. That means that the large groves are doing the same, unless they can afford to irrigate, which we don't see a lot of, here.
I grow the veggies I can, but again, without rain, we have to be careful of watering, because the water table is approximately 40" lower than normal, so there's no guarantee that our well will provide adequate water for household use, along with watering the veggies.
It's hard to know what to do......
Farmers, already, can't afford to buy grain to feed their livestock, which means they have to sell less than optimal livestock for horrifically, low prices..... if they don't get the grain crop this year, next year, they won't be able to raise livestock...... when meat and/or grains become scarce, the price goes up.. we all pay, because, not only does the price of meat go up, so does milk, cereal, eggs and everything else we eat.
I and my husband did farm in the midwest for quite a few years and we went through periods like this (though not so drastic).... if you can't grow the food for your livestock, you can't afford to feed the animals, so you have to sell them, at reduced prices.
People who have never lived on a farm and grown food to sell, might have a hard time understanding; but when weather conditions prevent farmers from growing crops, nobody prospers.
We see that here, in our area of FL, where citrus is a big crop...... We only have an orange tree and a grapefruit tree, now, but very day, I go out and see more fruit on the ground, than was there yesterday, because we haven't had enough rain, so the trees simply drop their fruit. That means that the large groves are doing the same, unless they can afford to irrigate, which we don't see a lot of, here.
I grow the veggies I can, but again, without rain, we have to be careful of watering, because the water table is approximately 40" lower than normal, so there's no guarantee that our well will provide adequate water for household use, along with watering the veggies.
It's hard to know what to do......
Yes, lots of people live in apartments but community gardens are sprouting up in abandoned lots. My friend lives in an apartment and for $25/year she has a plot in a community garden a few blocks from her home. Down the street from her is a guy raising chickens. In West Oakland there's a program that's put in over 300 gardens for the poor. They test the soil, and often build raised beds.
Bee keeping and canning has become a 'cool' thing to do.
I'm beginning to see more bees around after years of them disappearing.
Have you heard of Novella Carpenter's book about Urban farming ?
Do a search. Not all the news is bad news :)
Bee keeping and canning has become a 'cool' thing to do.
I'm beginning to see more bees around after years of them disappearing.
Have you heard of Novella Carpenter's book about Urban farming ?
Do a search. Not all the news is bad news :)
We're a net food exporting nation - there's no need for anyone to go hungry or even for prices to rise. Unfortunately, we're also a debtor nation in a global economy. Nothing will be done until the first group of Occupy protesters try to stop a grain ship from leaving.
That would be nice. We used to do that as well. However lots of people live in apartments and such today. Can you just imagine the mess it would be in a food shortage and even if they could garden and raise they own chickens, the new age wouldnt know what to do with them or how to raise them anyway. Much less canning and freezing.
My husband would call it trying to bleed water from a stone.
Interesting fact that the protests that have erupted world wide are caused mainly because of the price of food and housing.
Personally, I'm looking for a good place to garden and raise a few chickens.
Interesting fact that the protests that have erupted world wide are caused mainly because of the price of food and housing.
Personally, I'm looking for a good place to garden and raise a few chickens.
Is it Hyperinflation? i.e. we will need a wheelbarrow full of money to buy a loaf of bread
Sorry not my idea, can I blame brain fog?
Sorry not my idea, can I blame brain fog?
If it's what you saw last year, then maybe it's getting worse. In fact scientist say it is getting worse.
Food prices rising when gas prices rise makes sense because of how our food is shipped.
Food prices rising when gas prices rise makes sense because of how our food is shipped.
I'm telling ya, this is the same thing I witnessed last year. We drove through the mid west. Some parts were fine and some parts, the corn was knee high and burned up.
We just returned from a 2 week trip to the midwest, and trust me - they are hurting for rain. Much of the corn crop through several states is nearly burned up; even too dry to use for silage to feed cattle. Normally, as you drive by a field of corn, you can see the ears on the stalks....... not now, in a lot of places. Pasture grass, too, is burned up.
Some crops are too far gone, to recoup, whereas, in some areas, rainfall might help, but they need it now. Temperatures in many parts of the midwest have hovered over 100 degrees for over a month, with little/no rain.
As former farmers, we know what it's like when there's no crop in the fall; it's a very sad thing to see.
Some crops are too far gone, to recoup, whereas, in some areas, rainfall might help, but they need it now. Temperatures in many parts of the midwest have hovered over 100 degrees for over a month, with little/no rain.
As former farmers, we know what it's like when there's no crop in the fall; it's a very sad thing to see.
Sorry I can't find anything but economic collapse or depression, duh
Again, sorry
Again, sorry
Prices have been inching up weekly where I live as well. Now Im guessing we will have pest infestations as well. Back to beans and tators.
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