My brother and his family are today completing a drive from Denver to Ohio and back. I chatted with him as he began his drive from St. Louis this morning (he took his daughters to the Cardinals/Cubs game last night). He mentioned something that I hadn't heard much about in the national media.
As they've driven through farm country over the last few weeks, they've seen or talked to farmers about the serious drought problem. They'd seen "crispy corn" and crops plowed under. He said the situation was extremely bad.
The Wall Street Journal this weekend confirms his report:
The brutal drought killing crops in the Midwest this summer threatens to stick Americans with a higher food tab.
Corn futures have surged 48.5% since May 31, while soybeans are up 31.2%. Both commodities rose again Friday on deepening fears that scorching heat and lack of rain could make supplies scant. Wheat prices have soared 46.5%, and the heat is even hurting black beans and pinto beans. Weather forecasters see little relief in sight.
Corn, soybeans and wheat help drive prices throughout the nation's larder. Farmers buy corn and soybeans to feed chickens, cows and pigs, so higher grain prices can lead to higher meat prices. The effect also is felt further along the food chain in prices for everything from milk to cooking oil.
Retail prices might not reflect the impact for months, but investors already are bidding up contracts to buy other food commodities in future months. They also are dumping shares of companies that face rising bills to secure supplies, indicating skepticism among analysts that companies will be able to raise prices enough to compensate, given the tepid economy and persistently high unemployment.
Milk is up 15% since the end of May in the futures market, butter is up 13.8%, and sugar 23.2%.
Is it as bad as this report suggests? And, if so, why hasn't any discussion of it been a bigger part of the campaign? Or is it just the inside-the-beltway media that are downplaying this story?
Drought photo via Shutterstock.