Wednesday, June 27, 2012

Drought May Rival 1980s U.S. Scorcher That Cost $78 Billion

The drought in the U.S. Midwest that has pushed up corn prices 28 percent since June 15 may eventually rival a dry period in 1988 that cost agriculture $78 billion, a government meteorologist told Bloomberg.

This year’s weather pattern, which settled into the Great Plains and the Southwest last year and has spread into the Corn Belt, resembles those of a quarter century ago, Matthew Rosencrans, a drought specialist with the National Weather Service, said today at a forum in Washington. Sparse rainfall may drive crop costs up further, destroying livestock profits and raising food prices, said David Anderson, an agricultural economist at Texas A&M University.

 “Everyone’s worried about this,” Anderson said in an interview after speaking at the forum. Corn “stockpiles are already low,” he said. “We thought this was the year we might get some relief from that, and that may not happen. We’re going to have highly volatile prices the rest of the summer…”

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