Less than one month into the Summer, The Great & Terrible Drought of 2012 drought looks like the worst single national farm & water crisis since 1934 — and its getting worse every day.
The NYTimes writes:
“What is particularly striking about this dry spell is its breadth. Fifty-five percent of the continental United States — from California to Arkansas, Texas to North Dakota — is under moderate to extreme drought, according to the government, the largest such area since December 1956. An analysis released on Thursday by the United States Drought Monitor showed that 88 percent of corn and 87 percent of soybean crops in the country were in drought-stricken regions, a 10 percent jump from a week before. Corn and soybean prices reached record highs on Thursday, with corn closing just over $8.07 a bushel and soybeans trading as high as $17.49.
As of Sunday, more than half of the corn in seven states was in poor or very poor condition, according to the Department of Agriculture. In Kentucky, Missouri and Indiana, that figure is above 70 percent. Over all, only 31 percent of the nation’s corn is in good to excellent condition, compared with 66 percent at the same time last year . . .
The withering corn has increased feed prices and depleted available feeding land, putting stress on cattle farmers. A record 54 percent of pasture and rangeland — where cattle feed or where hay is harvested for feeding — was in poor or very poor condition, according to the Department of Agriculture. Many farmers have been forced to sell their animals. Because feed can account for nearly half of a cattle farmer’s costs, consumers could see a rise in the price of meat and dairy products, experts said. The high sustained heat has led the key components in milk, like fat and protein, to plummet more than usual, said Chris Galen, a spokesman for National Milk Producers Federation.
Not good . . .
click for giant graphic
Source:
Widespread Drought Is Likely to Worsen
JOHN ELIGON
NYT, July 19, 2012
http://www.nytimes.com/2012/07/20/science/earth/severe-drought-expected-to-worsen-across-the-nation.html
Category: Cycles, Food and Drink, Science
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Don’t worry, Free Market Capitalism™ will fix it.
Maybe they can find a way to tap the fresh water off of the gigantic iceberg that just broke off of Greenland.
BTW:
Didn’t we used to have a Strategic Grain Reserve?
With the free markets in commodities, and speculators completely unchecked, we get huge increases on actual prices, way beyond anything justified by supply and demand. As soon as the first reports suggests that the weather may cause a small rise in prices of food. The Wall Street sharks begin driving the prices up; as the prices begin going up this confirms that prices will go up ,and more speculators pile into the market – which drives prices up such that more speculators ……. A huge speculative bubble is created and prices driven up way beyond anything justified by supply and demand. This rob consumers of huge sums of money and destabilize the economy. When that bubble bursts we have fall in prices but that also overshoots way beyond what is justified in supply and demand; so the suppliers go belly up setting us up for the next squeeze on supply -driving another bubble.
Now why is it that we allow outsiders with nothing but speculative interests to play in these markets? and why is it that we do not have an 80% tax on all profits harvested in markets for essential commodities?
not that it makes everything better, but to put everything into perspective, on an inflation-adjusted basis American food is still at the low end of a big range that peaked in the 40′s-60′s….which partially explains our obesity epidemic.
and btw, while I’m a big fan of alt. energy, corn is an awful feedstock for ethanol. perhaps some of the ethanol producers will go bust this cycle.
Fortunately a great rice crop from India this year will make up for the US shortfall. Then again maybe not.
“A 22 percent shortfall in monsoon rains delayed sowing of crops from rice to cotton, stoking a rally in commodity prices and threatening to accelerate India’s inflation”
“Rice planting in India dropped 10 percent to 14.5 million hectares (35.8 million acres) this year from 16.1 million hectares a year earlier, the farm ministry said today.”
http://www.bloomberg.com/news/2012-07-19/weakest-monsoon-since-2009-to-shrink-india-rice-harvest.html
The 1930′s depression involved a dust bowl of epic proportions.
Here in the UK we had drought through to Easter. No sooner did some bureaucrat declare a hose pipe ban than it started raining. Months later it has yet to stop raining in any meaningful way. European farmers might have a crop but for many of them, combine harvesters will be sinking in upto their axles.
Me … well … we’re due to go camping in a week or so.
This is a North American Drought, and includes Mexico.
- North America Drought Monitor updated for June, and it looks worse.
http://www.ncdc.noaa.gov/temp-and-precip/drought/nadm/nadm-maps.php?lang=en&year=2012&month=6&submitted=true
The Southern US has been in drought conditions for the last 3 years,
ask the Texas Ranchers Exxon has bankrupted.
Let’s hope that high prices will force the gov’t to rescind one of the most idiotic policies ever enacted – the “ethanol mandate.”
Just don’t expect it to happen anytime soon: there’s ethanol lobby, there’s Wall St. lobby that certainly wants to let “the agg trade” to pad their bonuses (and send a few million more into poverty) and there’s a prospect of creeping up oil prices – without ethanol gasoline at the pump just may go up a few more pennies, *bad* for reelection of the incumbent government.
Not good for us and not good on the inflation front.
TAX CUTS are what’s called to deal with this problem…that and rapacious capitalism…when Wall Street controls every aspect of Government then we have arrived at the destiny Milton Friedman designed for us…the only way to rationalize the market…is to do more of what we’ve been doing for the last 33 years!
ONWARD! down the path that leads to the shining beacon on the hill, the 19th century awaits you with open arms!
Drove from Arizona to Michigan two weeks ago. Saw the drought up close and personal.
Nothing much to die or burn in Arizona…..
Utah, lots of fires
Colorado lots of fires (stopped to visit family)
Nebraska, lots of dead corn
Iowa, mostly green with lots of dry creeks and barely running rivers. Corn yields have been hurt bad though (stopped to visit family on the farm)
Illinois, some parts looked very good, others very dead
Indiana, probably the worst I saw
Michigan, dry creeks, dead corn and irrigation running 24/7. Some places running out of water to irrigate, and lots of dead corn and mostly dead soy beans. Irrigation pivots mysteriously shutting down and the power company denies doing it on purpose. Could be from voltage drops, which increases amp usage, which over heats things like motors.
It wasn’t a particularly pretty trip. Several days over 100F. Hot and parched.
We don’t spent much on food, so CPI in the US will not be all that much impacted. Be worried for developing world where the CPI is anywhere from 30% to 50% of the CPI basket
Sorry.
where FOOD is anywhere from 30% to 50% of the CPI basket
Not to minimize things, but rain, like stocks, will vary, and often greatly. Too bad Bernanke can’t drive up rainfall levels like he does market prices, including food.
An illustration of the tremendous variability is Houston. Last year Houston had a hundred-year drought and lost tens of thousands of trees. This year we’ve already had 35-40 inches of rain in our neighborhood.
I think we are having global warming, but don’t know that this is a symptom. There’s an old math theorem that says in any string of random numbers you can get arbitrarily large variables in the values.
And, there may be some calamities that rival a drought:
http://fuelfix.com/blog/2012/07/20/nm-fuel-spill-threatens-albuquerque-water-supply/
blame the administration for not cutting the ethanol mandate, not the speculators (and obama cares about the poor?)
supply and demand issues are the only thing driving this market, remember we are in the #2 hottest july in 120 years
for those interested, i think you have already killed the corn crop and now the trade is in the beans as podding is beginning early this year due to early planting,
i expect $20/bu beans
It IS shocking we haven’t heard a peep out of MSM or Washington on corn ethanol!
Tuely pathetic. Obama has a one track mind…keeping the fancy jet
Why don’t those farmers just ignore Obama, they can do it by themselves.
Just build your business by yourself! in the Sahara desert with your bare hands. What a man.
MikeDonnelly,
How right you are!
yosull,
I think you’ll find most of those farm state legislators on the GOP sides of the aisles.
Barry,
How does one invest for the next round of Autocratic Spring? Freedom to eat is a defining liberty.
Have a swell weekend.
corn ethanol is, certainly, one thing..
though, maybe, We should, actually, “Think Different”..
http://search.yippy.com/search?query=Industrial+Hemp+is+Drought+Resistant&tb=sitesearch-all&v%3Aproject=clusty
http://kentuckyhempcoalition.blogspot.com/2012/04/hemp-natures-super-fiber.html
http://extension.oregonstate.edu/catalog/html/sb/sb681/
http://hempforyou.com/versativa-industrial-hemp-facts-1-10/
for beginners..~
“Not good for us and not good on the inflation front.”
——–
The government doesn’t care about food or energy inflation because these items are not in its “core” basket.
lol, what drought? Not seeing it. This drought is weak compared to ones in the past and been dented majorly the last week.
Nothing more than idle speculation this board loves.
“Now why is it that we allow outsiders with nothing but speculative interests to play in these markets? and why is it that we do not have an 80% tax on all profits harvested in markets for essential commodities?”
I’m not an expert, but I think when a farmer sells his crop forward to lock in the price, he’s probably not selling his crop forward to another farmer. And if General Mills, with 100 years of experience in the grain markets, overpays for their grain, that’s their problem. I suspect they’re much more likely to slaughter speculators than to get gouged.
The graphic above reminded me of the story on NPR a few weeks ago about the 7-year drought in Texas (1950 to 57)
http://www.npr.org/2012/07/07/155995881/how-one-drought-changed-texas-agriculture-forever
It also reminded me that a decades long drought is believed to have ended native American societies all over the southwest.
… the heatings will continue until morale improves …
http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719
Global Warming’s Terrifying New Math
Three simple numbers that add up to global catastrophe – and that make clear who the real enemy is
The ethanol mandate is just a sop to legislatures like Grassley of Iowa. Let them grow sugar cane in Louisiana, and then as a sop to all of our energy bureaucrats lets have a sugar cane mandate and also eliminate the sugar cane tariff and stop using something as inefficient corn to make ethanol. And for those of you who love beef, good luck with that in the short term future.
If there was some sort of one-size-fits-all combined measure of food prices it would be really nice to have a small bar under each of those maps to show whether drought really does influence prices and by how much.
oddly that ethanol mandate thing originated with the democrats. but the GOP made fun of it, and wouldn’t vote for it. but when the GOP was in charge, they were able to get the votes to get it passed, and signed. so both parties have lead to the ethanol mandate, and its nothing but a way to get votes from farm states. and also oddly enough, those same farm states dont actually use ethanol in their gas. wonder why. maybe its that reduction in fuel efficiency . or the damage to engines. and seems like the mandate is so large, and the gas demand has shrunk so much, they they have raise the percentage of ethanol in gas. to the point that if you dont have relatively new car (newer than say 2001) that odds are against it being able to run on it, with out trashing the engine. but that wont matter until it starts happening to a large group of people. and while we could say Obama should have pushed to have it repealed, i haven’t seen any interest in the GOP to repeal it either. and it would require both to do it, so again its both parties.
Wall Street loves it when the sheeple starts blaming “Corn Ethanol” on rising food prices. Wall Street banksters say “look over there” – and the sheeple comply. When the speculators increase the demand for a commodity, then there is nothing General Mills can do to stop the increase in prices. They cannot stop securing their supply line and purchase on the spot market a week before they actually need the Corn – that has huge risks which they cannot afford (if the bet went wrong and they could not get any raw materials at that time, then their factories would lay idle, and costumers would consider them unreliable). So they are stuck with paying and passing on the artificial price increases that Wall Street create. Remember General Mills is not hurt by higher prices as long as their competitors also are forced to increase prices – so they have no real incentive to start gambling with their supply line.
If Corn prices were drivers of food price increases, then corn would always be the first to go up and it would increase more than the other food items. Paying farmers to not grow anything on their land is a lot more problematic (but that wouldn’t allow big oil to attack a competitor so Fox wouldn’t tell you about that). I do agree that corn ethanol is a stupid idea because it is a very inefficient way to obtain carbon neutral liquid solar energy. Sugar cane is much better, and a lot of other similar approaches to harvest solar energy into immediately useable liquid full (bypassing the 100 million years of incubation deep in earths crust) are being developed (algae based liquid fuels looks great and is also carbon neutral). The smartest way to completely bypass the liquid phase and the 100 million years of incubation deep in earths crust, would be to get direct harvest solar energy, but that approach has a lot of enemies among those who are profiting from polluting and destroying our planet.
I hope Obama is smart enough to ask congress to reduce the mandate from 10% to 8% for the next 5 years (while industry find better ways to produce ethanol), and then let the GOP drown in their own fat as they cannot figure out a way to explain why they cannot pass a simple 2 sentence bill to help society. The political cost to Obama would be much less since most environmentalist are not that hot on corn ethanol anyway.
I live in rural SW Michigan. It’s not only corn. Thanks to the amazing warm week we had in early March, we have lost cherries, apples, and other fruit crops. It’s really sad to see so much devastation. Our trees are turning brown, Willow trees are hit hardest. The pine and cedar trees in my yard are dropping needles and thinning out. Irrigated corn fields are chest high, non irrigated fields are knee high and brown. Hay fields are brown, soybeans are dying and cows are stressed and Lake Michigan was 79 degrees at my shore.
All I can say is may the oil and gas industrial complex and their purchased representatives in governments across the globe eat the waste from the Southbound end of a Northbound cow – repeatedly.
The problem to look for is 2013. This year’s disaster is already known, for the most part, though it remains to be seen how truly problematic the end result is. Imagine this weather continuing; fields that burn to the ground, poor yields, etc. lead to inflation.
If their is no subsoil moisture for planting 2013 crops, and we have a similar weather year, there will absolutely be famine in the USA. Or war. Or both.
Water is much more important than oil in the grand scheme of things.
“Here in the UK we had drought through to Easter. No sooner did some bureaucrat declare a hose pipe ban than it started raining. Months later it has yet to stop raining in any meaningful way. European farmers might have a crop but for many of them, combine harvesters will be sinking in upto their axles.”
It’s the cyclical nature of weather, and a telling sign that investors are getting desperate for short term returns that speculation in commodities is such a big deal now. Just like energy, we are screwing with each and every working American when these wild swings occur in things that we all HAVE TO HAVE. Over speculation sent us over the edge in 2008, and it will do it again. Recession in the US seems inevitable at this point. Maybe not Great Depression of the 1930′s all over again, but we just keep repeating the tales of those days.
The politicization of climate change will be the end of us all. It doesn’t really matter if it’s caused by carbon emissions. At the end of the day, the weather is warming faster than it ever has since the beginning of human history (geologists/climatologists believe many many more millennia than that).
Our society must start adapting to climate change NOW to avoid potentially prohibitively costly consequences later. This is not a political issue, it is an economic and scientific one. Adaptation programs implemented now have very high returns on investments when disasters strike, yet many politicians in big oil/coal states won’t even admit this is happening.
See North Carolina’s legislative mandate to not use sea level rise forecasts in permitting, siting, design or engineering of infrastructure or approval of developments. The potential losses in this single state is absolutely mind boggling, and when extrapolated to the entire country, social breakdown becomes inevitable.
Adaptation is critical. It does not have anything to do with human’s role in global warming. Spread the word, get programs started now.