The heat and dry weather this past month has been brutal, not only to farmers across the Midwest, but to ranchers. The losses already incurred by corn and soybean growers, cattlemen and those farmers that grow our grains is going to be in the billions of dollars.
The devastating affects of the drought we are experiencing across the country will impact consumers hardest in the fall. It will take that long for the USDA to add up all the losses, including crops, livestock, loss of rangeland and feed grains.
In another 3-4 months, shoppers could very well see an increase in the price of everything from cooking oil, cereal, granola bars and milk, to the cost of poultry and beef. The USDA says the cost of beef alone, could rise at least 6% over present cost.
Farmers plant corn anticipating record yield
The corn crop losses are going to be a little more difficult to determine. The initial forecast for corn was based on the harvest of a record crop this year. Farmers had planted more corn and soybeans, assuming the economy was on an upturn, and based on increased demand from foreign countries.
With the anticipated record crop comes the loss of as much as 60% of that crop, due to the drought. As of Friday, the price for a bushel of corn has reached $7.50. That's 50% higher than the expected price of $5.00 a bushel.
This steep price increase is passed on to ranchers, who use the corn to feed livestock. Because of the increased price of the corn to the rancher, it will end up costing an additional $75-$80 per head to feed his cattle. This is why the shopper is going to pay more for groceries at the check-out counter this fall.
Additional woes for cattlemen
With the drought and dry conditions affecting more than one-half the contiguous United States, and 1/4 of the country's pasturelands and rangelands rated as "good to excellent," cattle producers from Montana to Nevada are facing a very trying season.
Many ranchers use private land to graze their cattle, while many others pay a small fee to graze their stock on federal lands, overseen by the Bureau of Land Management and the U.S. Forestry Service. This arrangement has gone on for decades, based on old laws.
Recent wildfires in states such as Idaho, Wyoming, Montana and Nevada have displaced thousands of cattle from federal lands. Most of this land will take years before it recovers fully. What lands were not hit by wildfires got hit with the drought.
Rauhn Panting, with the University of Idaho, who works with ranchers and farmers, says, "We're going to run out of grass. It's going to be scary." Ranchers are being advised to vacate grazing lands, weeks and even months before when they usually have to leave.
Left with only two choices, feed or sell, many are opting to sell their cattle. The Torrington Stock Market in Wyoming, has recorded that 36,000 cattle were sold in May and June of this year. The usual average for these months is 5,500. Small ranchers, with 30-50 cow/calf pairs, are being hit the hardest.
As the drought and dry conditions continue across the country, it appears there is no end in sight. Forecasters indicate the same or worsening conditions to continue through September of this year. The best advice would be to tighten the belt a notch, and see what happens.