A recent news report (Aug. 23) from KTIV-TV (Sioux City, Iowa) included recent remarks on the 2012 Farm Bill from Sen. Chuck Grassley (R, Iowa), Sen. John Thune (R., S.D.), and Rep. Kristi Noem (R., S.D.).
The lawmakers stressed the importance of getting the Farm Bill passed before it expires on September 30th.
KTIV News 4 Sioux City IA: News, Weather and Sports
Ron Nixon reported today at The New York Times Online that, “The Agriculture Department said Friday that consumers can still expect higher food prices next year, but the expected increase was unchanged from last month, even as extreme heat in the Farm Belt continues to reduce the grain harvest and increase feed prices for livestock.
“According to the latest Agriculture Department consumer food price index, overall food prices are expected to increase 3 to 4 percent next year largely because of the drought, the same as last month’s forecast.
“‘The data out this morning shows that nothing much has changed,’ said Ephraim Leibtag, deputy director of research at the Economic Research Service at the Agriculture Department. The price of beef and veal will see the largest increases next year, the report said, almost entirely because of higher costs for feed, which is made from corn and other grains. Beef and veal prices are expected to increase 4 percent to 5 percent.The most immediate impact of the drought will be seen in poultry prices, the government predicted.”
Mr. Nixon added that, “Ironically, the Agriculture Department said the reduction in the number of cows could result in a temporary decline in beef prices this year as a surplus of cattle is sold and more meat enters the market.”
“A government estimate released earlier this month said that because of worsening drought conditions, farmers would produce about 10.6 billion bushels of corn this year, down from what was projected at the beginning of the year to be a record 15 billion bushels. The reduction in corn and soybean supplies has pushed up their prices to record levels,” The Times noted.
Click on the summary table below for an expanded view of the updated ERS data:
Meanwhile, Bloomberg writer Alan Bjerga reported last night that, “U.S. consumers, already paying more for food due to the worst drought in five decades, may soon see prices at the supermarket rise further because of fuel costs.
“‘Gasoline is the wild card’ of food inflation, said Chad Hart, an economist at Iowa State University. ‘Anytime you have oil and gas prices moving up, that will hit us on the food dollar.’
“Energy and transportation accounts for about 8.2 cents of each dollar spent on food, compared with about 4 cents for farm commodities, according to the U.S. Department of Agriculture. Processing, labor, packaging and other costs dominate the retail and restaurant prices of food, making the cost of corn less important to consumers than the price of the gas needed to transport it, according to USDA data.”
The New York Times has provided a very useful interactive graphical display at the paper’s webpage on the 2012 drought, “Drought Extends, Crops Wither.”
Time Times update noted that, “This summer’s heat and rainlessness, which rivals the devastating 1988 drought, has left crops withering in the fields and farmers trying to calculate their losses. An analysis by The New York Times looks at the widely varying effects of this summer’s heat and drought on crops critical to the nation’s farm economy.”
To view the complete interactive graphical feature from the Times, just click on this link.
Agricultural Economy: Drought
The Associated Press reported yesterday that, “The nation’s most withering drought in decades only got worse in several key farming states last week, despite cooler temperatures that at least gave those living there a break from this summer’s stifling heat, according to a new drought report released Thursday.
“In its weekly map, The U.S. Drought Monitor showed that as of Tuesday, just over two-thirds of Iowa, the nation’s biggest corn producer, was in extreme or exceptional drought — the worst two classifications. That’s up more than 5 percentage points, to 67.5 percent, from the previous week.
“Nearly all of Nebraska, Kansas, Missouri and Illinois are in extreme or exceptional drought, with Illinois showing the most-dramatic climb in those categories, spiking 17 percentage points in one week, to 96.72 percent, according to the map. In neighboring Indiana, where 5 inches of rain fell in some parts, the area of the state in exceptional or extreme drought fell 9 percentage points, to 37.09 percent.”