Chance of US Drought Heats Up; Food Squeeze Feared

Extremely dry weather in the Corn Belt this summer would put a squeeze on corn and soybean supplies, sending prices higher and hurting global food stocks

HOLLY NOTE: We have posted articles continuously for the past year detailing depletion of US and global grain reserves to record lows, grain thefts in Kansas, food shortages, rising food prices and resulting food riots, in hopes that you are getting this message: As tough as it might be right now, this is definitely the time to purchase significant food stocks. If you have missed any of these articles, please check the Food & Water ARKives for 2008 and 2007. This issue is too vital for you not to get the entire picture.

The Midwest is at the heart of our wheat and corn production. All it will take is one bad drought - which Iowa expects. For the past 6 months North Dakota is in the worst drought ever - and now possibly a global drought - and our food supplies will take a serious hit. Extreme flooding like the Midwest just experienced can wipe out food crops in a single day. With escalating fuel costs, there will come a point when truckers are unable to make a living and simply have to shut down.

Daily news address rampant concerns over rice, wheat, corn and soybean shortages. And now food rationing and hoarding is creeping into reality...

It's not enough that a huge portion of our grains goes to biofuel, tenuous crops are further impacted by a higher global demand for wheat-based foods on dinner tables. If drought, as addressed above, hit's America's read basket our remaining crops will be in deep weeds.

Stock up now - buy in bulk - and pack for long-term storage any grain products and foods you regularly consume. It's easy, it's great insurance and will save you loads of money in the long run. The longer you delay, prices are only going to escalate, your options will dwindle, along with selection. Please do this before your options close.

When reading news articles, it is our hope you'll read beyond the headlines and hear the unspoken message - a quiet urging to prepare.



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April 25, 2008
By Ayesha Rascoe
Reuters

The U.S. Midwest has enjoyed nearly 20 years without a major drought but forecasters worry the corn belt's luck could dry up this year, further squeezing tight global supplies amid soaring food prices.

Photo: Corn planted after the middle of May stuggles to grow in the summer heat at a farm in Dwight, Illinois, June 19, 2007. (Reuters /Mark Weinraub)

With its last major drought in 1988, the Midwest has reached its average span of 18.6 years between droughts.

Considering that statistic and current weather conditions, Iowa State University extension climatologist Elwynn Taylor said the corn belt has a one in three chance of drought this year.

"We do have to be prepared," Taylor said. "A 33 percent chance is high, that's a risk."

The Midwest's chances of drought are exacerbated by La Nina, an unusual cooling of Pacific Ocean surface temperatures that can trigger widespread changes in global weather patterns. If La Nina has not dissipated by July, Taylor saw a 70 percent chance for U.S. corn yields below the 30-year trend of 150.6 bushels per acre.

"We don't have any reason to think La Nina causes drought, but it certainly does aggravate it," Taylor said.

Drought is not a foregone conclusion for the Midwest, where excessive wetness has held up spring corn plantings. Crops may benefit from that extra soil moisture during a dry summer, said Brad Rippey, a U.S. Department of Agriculture meteorologist.

"It's way too soon to have any great alarm," Rippey said.

But crops planted during wet springs can develop shallow roots, making them more susceptible to a summer drought, warned National Oceanic and Atmospheric Administration drought specialist Doug Lecomte.

Lecomte said he saw a slightly heightened risk of drought, largely because there is tendency for dryness and warmth in western corn belt during and after La Nina.

LIVESTOCK AT RISK

If a drought brought on a major crop failure in the United States, the world's breadbasket, it would wreak havoc on global food prices, already at record levels.

A drought could push the price of corn to $8 to $10 a bushel, said Ron Plain, a professor of agricultural economics at the University of Missouri. May corn on the Chicago board of trade was at $5.82-1/4 a bushel at midday on Friday.

"Immediately, there would not be a whole lot of impact on the U.S.," Plain said. "The way we'd be impacted would be through meat, milk, and egg prices."

A spike in corn prices would hit U.S. livestock producers especially hard since they use corn to feed their animals.

"Pork producers, they're not weathering this current storm of high prices for corn that well," said Stewart Ramsey, a senior economist at Global Insight.

Unless they received extensive aid, Ramsey said a severe drought "would clean house" in the hog industry, leaving only the strongest pork producers in business.

Poultry and cattle producers also would suffer, and eventually American consumers would face a surge in prices at the supermarket.

WORLD GRAIN STOCKS LOW

As a wealthy country, the United States could weather higher food prices and declining supplies. But as the world's largest exporter of corn, America's recovery may come at the expense of the rest of the world.

The United States exported 2.13 billion bushels of corn in 2007, but a drought would force America to purchase corn back from the international market, leaving other countries scrambling for food staples.

"We would buy food out of the mouths of the rest of the world," Ramsey said.

World grain stocks already are at historically low levels. Further shortages would intensify competition between importing countries for available grain supplies, said Lester Brown, president of the Earth Policy Institute

Governments would probably have to ration food, said Brown, warning that levels of world hunger would rise.

"There are hundreds of millions of people in the world who are on the lower rungs of the global economic ladder and even with the current price increases a lot of them are losing their grip and starting to fall off," he said.

ETHANOL ROLLBACKS?

In the event of a crop failure, the U.S. government would need to ease cost pressures from livestock producers by offering feed assistance programs or providing loans.

The government would also have to roll back its corn-based ethanol usage mandate, which requires the use of 9 billion gallons of ethanol in motor gasoline in 2008.

"If the government would move quickly to change ethanol policy, it would go a long way towards reducing the negative effects of drought," Plain said, noting ethanol is the biggest growth factor in usage of corn. (Editing by Russell Blinch and David Gregorio)v

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