Tags: corn | Drought | food | prices

Experts: Worse Fears Over Drought Are Coming True

Tuesday, 14 August 2012 07:09 AM

The worst-case scenario concerning the current drought and its effects on crops are coming true, experts say.

The government reported it expects the lowest crop yields in 17 years, with total crop production coming in at about a third smaller than projected at the start of the growing season.

“The massive crop problems that everyone has been estimating and fearing have come true,” said Randy Mittelstaedt, director of research at R.J. O’Brien, a futures brokerage, CNBC added.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

Corn prices have shot up nearly 50 percent since June, with December corn futures hitting $8.34 a bushel.

Corn is a key input in many supermarket items as well as in beef, pork and poultry feeds, and consumers can expect higher prices down the road.

“We had our second-worst drought in almost 30 years this year. The market’s reacted and the market will be able to recover and get back to normal pricing but not until the middle of next year,” said Rich Nelson, director of research at Allendale, CNBC added.

“For the general consumers, (it means) higher meat prices, higher dairy and higher egg prices.”

Agriculture Secretary Tom Vilsack has said U.S. farmers will meet demand and added that U.S. households and even export markets shouldn't fear supply shortages, while prices won't rise in the short term.

"Americans shouldn't see immediate increases in food prices due to the drought," said Vilsack, according to the Associated Press.

"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."

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

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Tuesday, 14 August 2012 07:09 AM
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