USDA’s Economic Research Service says the drought is seriously affecting U.S. agriculture – impacting the crop and livestock sectors and potentially increasing food prices at the retail level.
Almost 40-percent of agricultural land is experiencing severe or greater drought at this point – which means the 2012 drought is more extensive than any drought since the 1950s. ERS will release its next farm income forecast August 28th. They say the drought’s impacts will be reflected – as 62-percent of farms are located in areas experiencing drought. Nine-percent are experiencing extreme or exceptional drought.
Based on the 2010 value of production – ERS says about two-thirds of all crops and two-thirds of all livestock are produced in areas experiencing at least moderate drought. ERS says 44-percent of cattle production and nearly 40-percent of corn and soybean production is in areas experiencing at least severe drought.
ERS says the farm price of corn has already increased – with additional increases depending on the extent of the drought. The price of other crops – such as soybeans – and other inputs in the food supply – such as animal feed – will also be affected. The effect on retail prices – ERS notes – will depend on the severity of the drought and will begin to appear on supermarket shelves this fall.
ERS suggests the impacts on beef, pork, poultry and dairy will likely be seen within two months.
This week the Northern Ag Network’s Russell Nemetz interviewed Jim Bower with Bower Trading about the drought’s impact on Ag markets and food prices.
Source: NAFB News Service and Northern Ag Network