Wednesday, July 18, 2012

Measuring Significant Drought Years


More than half of the continental United States was in moderate to extreme drought in June -- including corn- and soybean-producing states -- damaging crops and impacting prices at the grocery store.
Some say if the hot, dry weather continues, this year's drought could rival the "dust bowl" years of the 1930s:

The United States also suffered drought conditions in the 1950s, particularly in the Midwest, the Great Plains and the Southwest:
Source of maps: National Oceanic and Atmospheric Administration. The Palmer index, developed in 1965 by W.C. Palmer, compares the amount of precipitation in an area to the average amount expected.

"It's a critical time of pollination for corn, and the dryness is impacting yield," said Brian Fuchs, climatologist with the National Drought Mitigation Center at the University of Nebraska in Lincoln. "Soybeans come a little later, but with the dryness and heat, it's still stunting growth."
Overall, commodities markets are responding in anticipation of a reduced harvest and in turn, any users of the products in their raw form are seeing prices increase, he said.
Joe Glauber, chief economist at the U.S. Department of Agriculture, said poor people who spend more of their income on food are impacted the most.
"Anytime you have food inflation, it's regressive in that it hits poor families harder," he said. "There are adjustments in the food stamp program that will reflect food price increases over time, but any increase in food costs, poor people are hit harder."
Cattle producers are feeling the pinch with dried pasturelands, forcing some to sell off their stock. The flood of beef to the market will mean lower prices in the short term, but heftier price tags are expected later.
Producers of the biofuel ethanol, made from corn, also will be impacted, said Fuchs. "Some plants have had to shut down production because they can't make ethanol at the price corn is at already."
The next national crop survey by the U.S. Department of Agriculture is in August, which will give the agency -- and others -- a better sense of the drought's effects on food production.

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