The Drought of 2012 Continues

Food System
Jan 14th, 2013 | By Amy Leibrock

While the big weather news this fall focused on Hurricane Sandy, the drought of 2012 continues to affect more than 60 percent of the United States and is forecast to continue through at least March 2013 in most of the affected areas. While consumers have yet to see a significant impact on food prices, a new report from the U.S. Department of Agriculture’s Economic Research Service predicts food prices will increase between 3 and 4 percent in 2013.

Unlike a quick and destructive event like Hurricane Sandy, a drought’s damage is seen in ripple effects. Low 2012 corn yields have sent livestock feed prices up. Ranchers, in turn, have thinned their herds to stay afloat, which will translate into higher meat prices in 2013. “We will likely see the earliest impacts for beef, pork, poultry and dairy (especially fluid milk),” the E.R.S. said. “The full effects of the increase in corn prices for packaged and processed foods (cereal, corn flour, etc.) will likely take 10-12 months to move through to retail food prices.”

The drought has also affected this year’s winter wheat crop, which is the poorest in at least 25 years. Another industry that’s hurting is barging—low water levels in the Mississippi River have slowed down shipping and may cost $7 billion in losses through the end of January. All told, the costs of the drought, estimated at $60 to $100 billion, could top those of Hurricane Sandy.

Despite recent winter storms in parts of the country, water-starved areas have a long way to go before drought conditions will be over. “Historically, severely deficit precipitation years of the magnitude of 2012 do not recover to normal annual precipitation in a single year,” said Elwynn Taylor, Iowa State University extention climatologist and professor of agronomy, in a report in early December. This story is far from over, it seems. Like the farmers, we’ll be watching the skies and reports this winter and spring to see how things develop.

Tagged: the cost of food, why food prices are rising, 2012 drought, Uncategorized

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