FarmPolicy

July 28, 2017

Agriculture Secretary on U.S. Drought

From C-SPAN today, “Agriculture Secretary Vilsack spoke at the White House daily briefing about his department’s efforts to combat the nation’s biggest drought since 1988.”

Photo via USDA: Sec. Vilsack Briefs the President on the U.S. Drought.

Video replay, click here. Audio download here (MP3)

Transcript

JAY CARNEY, White House Press Secretary: Thank you very much. Welcome, everybody, to the White House for your daily briefing. As I think you had advanced warning of, I have with me today the Secretary of Agriculture, Tom Vilsack. As you know, he briefed the President today on the drought that is affecting a significant portion of the country. The President asked for this briefing. And I asked that Secretary Vilsack join me here today to give you an update and to take your questions on issues surrounding the drought.

If you could, as is past practice, hear Secretary Vilsack’s presentation, then ask questions that you have for him. I will, of course, remain here ready to take your questions on other subjects.

And with that, I give you Secretary Vilsack.

VILSACK: Jay, thanks very much.

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Federal Reserve Beige Book: Observations on the Ag Economy

Today the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included the following observations with respect to the U.S. agricultural economy:

Sixth District- Atlanta– “Varying levels of drought conditions had expanded through much of the District resulting in stress to some crops. However, the June tropical storm helped some areas. Compared with last year, June’s prices paid to farmers were down for cotton and corn while prices for oranges, beef, and soybeans increased.”

Seventh District- Chicago– “Extreme heat and drought conditions spread across most of the District, stressing both crops and livestock. Forecasts made in June called for possibly record crops of corn and soybeans; now it appears the District’s harvest will likely be below average, with little prospect for improvement and plenty of downside risk. The corn crop is in the most danger of further damage, as plants entered a critical stage of development with insufficient moisture. Corn and soybean prices moved sharply higher, and wheat prices also rose. Hog prices were higher, cattle prices were little changed, and milk prices moved lower. With higher costs and the outlook for a decline in revenue, insurance coverage may provide an important safeguard for many farmers this year. Insurance coverage is widespread for corn and soybeans, but is less prevalent for some other products. Furthermore, several years of higher-than-usual farm income have left many operations in a better position to absorb losses this year.”

Eighth District- St. Louis– “As of the end of June, the majority of cotton, corn, soybean, sorghum, and rice crop conditions were rated as fair or better in all District states with the exception of sorghum crop conditions in Illinois. Winter wheat harvests were either complete or close to completion, and more than 88 percent of the crop conditions were rated as fair or better. However, the fraction of pasture and range in good condition or better decreased in all District states since the previous report.”

Ninth District- Minneapolis– “District farmers mostly continued to benefit from favorable weather conditions. Drought that was threatening corn and soybean production throughout the Midwest has not had much effect on Minnesota and North Dakota, where most of those crops were rated in good or excellent condition. However, crop quality was somewhat weaker in Wisconsin and in South Dakota, where drought conditions were more prevalent. Prices received by farmers in June—prior to drought damage in other parts of the Midwest—increased from a year earlier for soybeans, hay, dry beans, poultry, and cattle; prices decreased for corn, wheat, hogs, and dairy products.”

Tenth District- Kansas City– “Agricultural growing conditions deteriorated substantially since the last survey period as drought spread across the District. Extremely hot, dry weather hindered crop development and more than half of the District’s corn and soybean crops were rated in fair or worse condition. Crop prices rose sharply as intensifying drought and few prospects of precipitation cut corn and soybean yield forecasts. The winter wheat harvest was nearly complete with better than expected yields in some regions. To preserve drought-stressed pastures, some cattle ranchers were considering selling feeder calves early, especially with high feeder cattle prices. Losses mounted for feedlot operators as feed costs soared. Rising export demand enticed some hog producers to expand production. Strong farm and nonfarm investor demand drove farmland prices higher.”

Eleventh District- Dallas– “Agricultural conditions deteriorated slightly due to hot and dry weather. Planting neared completion and crops were mostly in fair to good shape, with conditions much better than a year ago. Since the last report, livestock producers have seen pastures dry out, cattle prices fall, and feed costs increase. Crop prices generally increased over the past six weeks, particularly for corn, although cotton prices fell sharply.”

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PBS NewsHour- Facing Drought, Farmers’ Crops Taking Heat

Watch Facing Drought, Farmers’ Crops Taking Heat on PBS. See more from PBS NewsHour.

U.S. Drought and Farm Bill Issues; Trade; and; Regulations

U.S. Drought and Farm Bill Issues

A recent National Weather Service (NWS) update for Northern Indiana stated that, “The hot and dry weather in June and July only intensified on-going drought conditions across the area. Moderate to extreme drought conditions are present across much of Northern Indiana, Southern Lower Michigan and Northwest Ohio, with drought conditions across most of the region, according to the latest Drought Monitor.”

More specifically, the NWS office in Indianapolis, Ind. has indicated that, “Severe to exceptional drought conditions existed in 80% of the state according to this week’s U.S. Drought Monitor while moderate drought conditions continued across the remainder of the state…[D]rought conditions in portions of central and southern Indiana were worse than the Dust Bowl Days of the 1930s. From June 1–July 12 much of central Indiana had received less rainfall and been nearly as hot as the summer of 1936.”

The NWS report added that, “The effects of the drought will have a large impact on Indiana agriculture.  Late season crops, like corn and soybeans, may see their worst yields since the Great Drought of 1988…possibly even lower.”

And a NWS update for Grand Rapids, Mich. noted recently that, “Ongoing persistent dryness along with well above normal temperatures has led to steadily worsening drought conditions across the region. The outlook for the remainder of July indicates continued below normal rainfall and above normal temperatures. A continued warmer and drier than normal scenario will undoubtedly support a detrimental increase in regional drought severity. Extended drought conditions will lead to further water supply issues, such as record low stream flows and heavier strains on aquifers. Agricultural loss estimates will continue to mount. Crop yield estimates will likely diminish and livestock stress and losses will increase.”

A recent NWS statement for the Quad Cities region (Iowa, Illinois) noted that, “Moderate to severe drought conditions are worsening across much of the Midwest and Corn Belt including Central and Eastern Iowa…Southern Wisconsin…Almost all of Missouri…And all of Illinois.”

And this graphic illustration provided a look at extreme temperatures for parts of the Midwest from June 1 through July 7.

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