Winnipeg Free Press - PRINT EDITION

U.S. slashes expectations as drought ravages crops

  • Print

ST. LOUIS -- The government slashed its expectations for U.S. corn and soybean production for the second consecutive month Friday, predicting what could be the lowest average corn yield in more than 15 years as the worst drought in decades grips major farm states.

Nonetheless, Agriculture Secretary Tom Vilsack, in a statement supplied exclusively to The Associated Press, insisted U.S. farmers and ranchers remain resilient and the country will continue to meet demand as the global leader in farm exports and food aid.

The U.S. Agriculture Department cut its projected U.S. corn production to 10.8 billion bushels, down 17 per cent from its forecast last month of nearly 13 billion bushels and 13 per cent less than last year. That also would be the lowest production since 2006.

The USDA, in its World Agricultural Supply and Demand Estimates report, now expects corn growers to average 123.4 bushels per acre, down 24 bushels from last year in what would be the lowest average yield in 17 years.

Soybean production is now forecast at 2.69 billion bushels, a 12 per cent decline from last year and well off the 3.05 billion bushels the USDA had expected last month.

The expected average yield of 36.1 bushels per acre would be the lowest since 2003.

Corn farmers had expected a record year just months ago, when they sowed 96.4 million acres -- the most since 1937.

The USDA now predicts only 87.4 million acres will be harvested, although it notes the crop still could be the eighth-biggest in U.S. history.

On Thursday, the UN food agency drew a direct correlation between price hikes in basic food commodities and the months of parched conditions in farm states.

The Rome-based Food and Agriculture Organization said in its monthly price report its overall food price index climbed six percentage points in July, although it was well below the peak that was reached in February 2011.

The FAO's index is considered a global benchmark used to track market volatility and price trends.

The FAO index measures the monthly price changes for a basket of food, including cereals, oils and fats, meat, dairy products and sugar.

Severe drought punishing the U.S.'s midsection has sent corn prices soaring, and expectations of crop damage from dry weather in Russia sent world wheat prices up 19 per cent, according to the FAO. Spikes in the prices of staple foods have led to riots in some countries in recent years.

Vilsack tried to tamp down such concerns Friday.

"Americans shouldn't see immediate increases in food prices due to the drought," Vilsack said as he visited drought-stricken Nebraska. "What is important going forward is that we continue to do all we can to help the farmers, ranchers, small businesses and communities being impacted by this drought."

Rick Whitacre, a professor of agricultural economics at Illinois State University, said consumers may see modest price increases at grocery stores because corn is found in everything from cosmetics to cereal, soda, cake mixes and candy bars. He said the biggest price jump is likely to be a four to six per cent increase for beef and pork, as many ranchers have sold livestock as pastures dry up and feed costs rise.

"You're going to see the ripple of this go out for quite a distance," Whitacre said.

The U.S. leads the world in exporting corn, soybeans and wheat, and the surging prices are most likely to hurt poor, food-importing countries, said a study by British charity Oxfam issued on the eve of the UN report.

Vilsack said he has pressed Congress to pass a comprehensive, multi-year farm bill "that gives farmers and ranchers more certainty in this tough time, while giving USDA tools to help those producers affected by weather-related events beyond their control."

The USDA foreshadowed the new, lower yield projections earlier this week, when it reported half of the nation's corn crop and 39 per cent of its soybeans were rated poor or very poor. The nation hasn't seen drought damage this bad since 1988.

Friday's USDA report amplified the troubling picture painted a day earlier when the latest weekly U.S. Drought Monitor map showed drought conditions continue to worsen in key farming states in the Great Plains. That update showed the expanse in extreme or exceptional drought -- the two worst classifications -- rose to 24.14 per cent, up nearly two percentage points from the previous week.

Federal scientists say this July was the hottest on record, smoking out even the sweltering temperatures set in the Dust Bowl in the 1930s. The National Oceanic and Atmospheric Administration reported Wednesday the stretch from August 2011 through July this year was the warmest 12-month period the U.S. has experienced.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition August 11, 2012 B5

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Stuart Murray announces musical RightsFest for CMHR opening weekend

View more like this

Photo Store Gallery

  • A baby Red Panda in her area at the Zoo. International Red Panda Day is Saturday September 15th and the Assiniboine Park Zoo will be celebrating in a big way! The Zoo is home to three red pandas - Rufus, Rouge and their cub who was born on June 30 of this year. The female cub has yet to be named and the Assiniboine Park Zoo is asking the community to help. September 14, 2012  BORIS MINKEVICH / WINNIPEG FREE PRESS
  • Marc Gallant/Winnipeg Free Press. Local- Korea Veterans Association stained glass window at Deer Lodge Centre. Dedication with Minister of Veterans Affairs Dr. Rey Pagtakhan. March 12, 2003.

View More Gallery Photos

Poll

Will higher pork prices change your grocery-shopping habits?

View Results

View Related Story

Ads by Google