Drought severely diminished U.S. crop supply
Corn dead from drought sits in a field August 4, 2012 near New Harmony, Indiana.
The Agriculture Department is scheduled to release its latest estimates for this year’s corn and soybean crops this morning. The past few reports haven’t been good. The USDA is forecasting the smallest corn and soybean harvest since 2004 -- that’s mostly due to the drought gripping the nation’s midsection.
Our summer of sun scorched this year’s corn and soy beans, and there’ll only be so much to go around. “Who’s going to go without?" asks Bill Tierney, chief economist at the Ag Resource Company. "Is it going to be exports, is it going to be livestock producers? Is it going to be ethanol and biofuels production?”
Tierney says livestock farmers will have to cull their herds if they don’t have enough feed. That’ll mean more, cheap meat at first, but, then meat supplies will plunge. Last month, Twitter was all aflutter over reports of a coming bacon shortage, but pork producers quickly said that was a bunch of hogwash. They say there’ll be plenty of pork, you’ll just pay more for it.
Darrel Good, an agricultural economist at the University of Illinois, predicts prices will creep up over the next year or so. “We’ll notice that mostly at the meat counter," he says, "and livestock products such as eggs and milk.”
By some estimates, bacon prices will sizzle up ten percent. So buy a freezer, and stock up now.