US reels from worst drought in 50 years

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US reels from worst drought in 50 years

July 28, 2012
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Darryl Fears

WASHINGTON: The worst drought in the US in a half-century has spread, and 76 counties in six Midwestern states have been declared disaster areas as the Obama administration added them to the more than 1300 counties already on the list.

At least two-thirds of the area of the mainland US is experiencing moderate to exceptional drought, says the US Department of Agriculture’s Drought Monitor. Hot, dry conditions have caused significant damage to corn, soybeans, pastures and rangeland from California to upstate New York, the department said.

Corn and soybean crop ratings have worsened for seven weeks in a row, and are the lowest recorded since 1988, it said. Fifty-five per cent of the nation’s pastures and rangeland areas are rated poor or very poor.

This week’s disaster declaration for counties in Indiana, Illinois, Michigan, Wisconsin, Nebraska and Kansas made ”all qualified farm operators … eligible for low-interest emergency loans,” the department said.

The Agriculture Secretary, Tom Vilsack, said he met with the President, Barack Obama, last week to discuss what the agency could do to help farmers and ranchers.

Crop farmers are usually insured against losses, but often struggle to pay insurance premiums in hard times. Livestock farmers are generally uninsured and rely on loans to cover the loss of animals and the expense of hauling water and feed.

Five days after the meeting, Mr Vilsack announced that the Agriculture Department would lower loan interest rates and allow livestock farmers to use more acres in the Conservation Reserve Program for haying and grazing. Also, the department planned to encourage crop insurance companies to give farmers a brief grace period for unpaid insurance premiums.

The department has designated 1369 counties in 31 states as disaster areas – 1234 because of drought. Sixty-seven per cent of the nation’s livestock pastures are in areas affected by drought.

Corn feed represents 40 per cent to 50 per cent of livestock farmers’ costs. When food for the animals is not available or when the cost is too high, farmers liquidate their stock by selling it for slaughter. The remaining herds become smaller, and prices go up over time, eventually affecting consumers.

”We don’t really consume most corn directly,” said Joe Glauber, the department’s chief economist. ”It gets in our bellies through livestock.”

Because of the drought and declining inventories of corn and soybeans, food prices could increase as much as 4 per cent in 2013, the department said. On Wednesday, the price of soybeans rose nearly 3 per cent, and corn was up 1 per cent.

More than half of corn traded worldwide is usually exported from the US, but this year, livestock farmers, squeezed by drought, are turning to other nations for corn.

”It’s really depressing,” said the association’s chief executive, Rick Tolman. ”It’s not getting better; it’s getting worse.”

Corn farmers are losing their crops to drought and watching their neighbours do the same.

”It’s psychologically difficult,” Mr Tolman said.

A corn crop is planted in April and harvested in September and October. But June is a crucial month when corn pollinates and needs rain, which did not come this year. Stalks are deformed and often have no ears or shrivelled ears with tiny kernels.

Having insurance only eases the pain. Growers normally pay a large deductible, and many can afford to cover only half or two-thirds of their crop.

Because corn yields are much smaller, a bushel sells for a higher price for some farmers, but not most, Mr Tolman said. Most corn growers have already signed contracts to sell at a lower price because yields were projected to be plentiful in May, which probably would have caused prices to drop.

Mr Tolman looked on the bright side. ”We don’t normally have this kind of drought, and hopefully we won’t have one again for a long, long time. Next year, we’ll recover,” he said.

The Washington Post

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