Sept 7, 2012
Meanwhile, scouts with the Pro Farmer Midwest Crop Tour on Monday reported an average estimated corn yield in Ohio of 110.5 bushels per acre, down from the tour’s estimate of 156.3 bushels a year ago. In South Dakota, tour scouts reported an average yield estimate of just 74.3 bushels per acre, down from 141.1 bushels a year ago.
Even though the mainstream media seems to have lost some interest in the drought, we should keep it front and center in our minds, as it has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River. All this and there’s also a strong chance that today’s drought will negatively impact next year’s Winter wheat harvest, unless a lot of rain starts falling soon.
The worst drought to hit U.S. cropland in more than half a century could soon leave Americans reaching deeper into their pockets to fund a luxury that people in few other countries enjoy: affordable meat.
Drought-decimated fields have pushed grain prices sky high, and the rising feed costs have prompted some livestock producers to liquidate their herds. This is expected to shrink the long-term U.S. supply of meat and force up prices at the meat counter.
I spoke with Caldwell [of Indiana horse rescue] and a number of other horse-rescue organizations around the country by telephone this week. The relentlessly hot dry weather, amplified in many areas by wildfire, has been devastating to farmers, ranchers and other horse owners.
‘Everybody is using their winter hay now. The pastures are destroyed and they probably won’t recover before winter,’ said Caldwell. ‘The price of hay has doubled, and the availability is down by 75 percent.’
Caldwell is somewhat sanguine about his own lot, but not optimistic about what lies ahead.
‘Today the problem is not nearly as bad as it’s going to be,’ he told me. ‘It’s terribly bad today, but it is going to get a lot worse.’
‘We need to act urgently to make sure that these price shocks do not turn into a catastrophe hurting tens of millions over the coming months.’
But step outside the developed world, and the price of food suddenly becomes the single most important fact of human economic life. In poor countries, people typically spend half their incomeson food — and by ‘food,’ they mean first and foremost bread.
When grain prices spiked in 2007-2008, bread riots shook 30 countries across the developing world, from Haiti to Bangladesh, according to the Financial Times. A drought in Russia in 2010 forced suspension of Russian grain exports that year and set in motion the so-called Arab spring.
Yemen has a catastrophic food crisis. Nearly half the population, 10 million people, does not have enough to eat. While 300,000 children are facing life threatening levels of malnutrition.
The United Nations says Yemen is already in the throes of a disaster.
‘The levels are truly terrible. Whatever we do thousands upon thousands of children will die this year from malnutrition,’ Unicef’s man in Yemen, Geert Cappelaere, said.
‘In some areas child malnutrition is at 30%, to put it in context, an emergency is 15%. It is double that already.’
Leading water scientists have issued one of the sternest warnings yet about global food supplies, saying that the world’s population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages.
Humans derive about 20% of their protein from animal-based products now, but this may need to drop to just 5% to feed the extra 2 billion people expected to be alive by 2050, according to research by some of the world’s leading water scientists.
‘There will not be enough water available on current croplands to produce food for the expected 9 billion population in 2050 if we follow current trends and changes towards diets common in western nations,’ the report by Malik Falkenmark and colleagues at the Stockholm International Water Institute (SIWI) said.
The United Nations, aid agencies and the British Government have lined up to attack the world’s largest commodities trading company, Glencore, after it described the current global food crisis and soaring world prices as a ‘good’ business opportunity.
With the US experiencing a rerun of the drought ‘Dust Bowl’ days of the 1930s and Russia suffering a similar food crisis that could see Vladimir Putin’s government banning grain exports, the senior economist of the UN’s Food and Agriculture Organisation, Concepcion Calpe, told The Independent: ‘Private companies like Glencore are playing a game that will make them enormous profits.’