The cornfields here in Iowa are looking a little brown around the edges. We’re on the edge of the worst Midwest drought since 1988. I’ve been worried about this since we finished winter without any snow cover. Not much rain fell this spring, and this summer has been really hot and dry. My area is about 5 inches below normal rain fall. As you may have heard, a good chunk of the corn belt is in similar or worse straits. Some areas in Indiana and Arkansas are 12 inches below normal rain fall.
The U.S. Agriculture Department has issued a natural disaster declaration for more than 1,000 U.S. counties facing severe drought. This disaster declaration is the largest ever from the Agriculture Department and includes one-third of counties and spans 26 states.
Who eats corn? You may not be a fan of canned corn, but I promise you, you eat a lot more corn than you think. Most of the cattle and pigs and poultry slaughtered in this country are fed large quantities of corn. With meat prices already at record highs, things may get really uncomfortable, really quickly. If the corn crop fails and not enough is harvested, corn prices will rise. Meat producers will respond by slaughtering animals to reduce the head count they have to keep fed. This means ample meat availability and lower prices this year, but in 6-9 months, there will be far less meat on the market than would normally be out there for sale. Those animals will have been slaughtered early, at smaller weights, just to get rid of them. What is available will have eaten 6 months worth of expensive corn and be priced accordingly. Or, it will have eaten 6 months worth of the grossest assortment of slaughterhouse leftovers you can imagine, as a cheaper alternative to corn.
Chris Hurt, another Purdue agricultural economist, says food inflation, which had been estimated at 2.5%-3.5% for this year, likely will rise to 3% to 3.5%, and “more of that will be coming at us in 2013.”
Everything that uses corn syrup as sweetener is going to rise in price. That means everything from cereal to soft drinks, ketchup to ice cream. Now, I know I’ve pretty much weaned my family off of anything that contains corn syrup. That will help, but we do buy meat, and eggs and milk and butter and cheese, and I bet all of that is going to go up. I have grass fed sources for some of that, but not all of it.
Retail ground-beef in the U.S. averaged $3.016 a pound in March, the highest since at least 1984, according to the Bureau of Labor Statistics. Grocers sold whole chickens at a record $1.401 a pound on average in April, and bone-in breasts rose 12 percent this year, government data show. The Iowa Corn Growers Association estimates one bushel of the grain converts to 5.6 pounds of retail beef. So, watch the bushel price on the Commodity Exchange markets, and you can estimate the the price of beef in the store. (If you don’t drive yourself to drink first.)
Are you prepped for corn crop failure and higher priced food? You had better get that way quick.
– Calamity Jane